When an employment is described as permanent it is generally either a reference to the normal retiring age, intervening sickness and misconduct excepted; or at least to the expectation of the employee that unless exceptional circumstances intervene he or she may anticipate continuous employment for an indefinite time.
See also Macken, McCarry and Sappideen, The Law of Employment, 4th ed, 1997, at p 230.
Developments under the fourth contract
27. Under this topic I shall deal with both changes to the fourth contract and the worker's actual work under it.
28. Exhibit 20 is an interoffice memo on the stationery of Placer Pacific Ltd from Greg Hall to the worker, dated 10 March 1994. The subject matter of the memo is described as "Field Allowance/Field Leave Decision", and the substance of the memo is preceded by the heading "Addendum to Contract". The substance of the memo is:
As previously consulted effective 1 January 1994, the Living Away from Home Allowance clause is to be deleted for your Contract (Clause 2.6 or in some cases 2.5) in favour of a new Field Break Clause 3.2.
This change becomes an addendum to your initial contract which was effective 1 April 1993, as follows:
"3.2 Field Breaks
Field break entitlements will accrue at the rate of one day for each Saturday, Sunday and Public Holiday worked during the period spent in the filed or spent travelling to and from the field site. Field break will be taken at a time mutually agreeable between yourself and your Supervisor. If not taken as leave, up to 50% of the total field break accrued in any one calendar year may be paid out to you at the end of that calendar year. Any additional field leave accrued and not taken can only be transferred into subsequent years or paid out with the written agreement of your Supervisor and the Exploration Manager.
Field leave carried over to the next year may only be taken as leave and will not be paid out".
Attached are two copies. Please keep one for your records and sign and return the second one to Jenny Westen, Sydney.
29. The worker signed and dated the memo on 11 March 1994. Although the worker may have been previously "consulted", this "change to the contract" appears to have been imposed by Placer Pacific Ltd (? acting as agent for PPML).
30. Under the fourth contract, the worker was entitled to a living away from home allowance after 21 days consecutive days in the field, for those 21 days and each day thereafter, equal to 10% of salary. The Addendum rescinds that benefit in its entirety. Under the fourth contract, a field break (that is, leave with pay) was available equal to every Saturday, Sunday or Public Holiday spent in the field. This could be accumulated and paid out in cash. The Addendum only allows the cashing of 50% of total field break, not taken as leave with pay. The Addendum reduces this financial benefit available to the worker. It is a moot point whether this new term is a variation of the original (that is, fourth) contract or constitutes its recision and the establishment of a new (fifth) contract. See Macken, McCarry and Sappideen, The Law of Employment, 4th ed, 1997, pp 243-249 esp at p 249 subtit. "Wage Changes". For current purposes, it is unnecessary to decide that issue but, in my view, the preferable way of dealing with it is to regard this as a new contract, accepted by the worker on 11 March 1994.
31. The contract was further amended with effect from 1 November 1994. The worker was advised of this by letter of 10 November 1994 (exhibit 24). To comply with Federal Law, the worker's superannuation payments were to be made by the employer on top of the salary payable under the contract. This effectively meant that the worker received a 5.263% increase in salary. This is properly viewed as a variation of the contract. The worker was hardly likely to object to such a change.
32. In accordance with the contract (both fourth and fifth) the worker's salary was increased annually with effect from 1 January each year.
33. After 1 April 1993, the worker worked in Vanuatu in 1993 (exhibit 19), in Indonesia in 1995 (exhibits 28 and 31) when he was paid a loading equal to 15% of salary, and in 1996 in Papua New Guinea with Misima Mines Ltd which operated a mine in the Milne Bay area. Misima Mines Ltd was owed 80% by Placer Niugini Ltd and 20% by the PNG Government. It is clear that during his service in PNG and probably whilst in Indonesia, the worker was seconded (and I use that verb advisedly) from PPML to work for Misima Mines Pty Ltd and the Indonesian Company, PT Placer Emas Indonesia. His salary was always paid by PPML which "back charged" for this work, to the foreign company. For example, when the worker requested Annual Leave in 1996 he made requests both to Misima Mines Pty Ltd (exhibit 35) and to PPML (exhibit 36).
Development of the position of District Geologist-Melanesia
34. Sometime in 1996, Mr Stewart who then held the position of "Exploration Manager" developed the idea of appointing a "District Geologist-Melanesia". He obtained approval in principle for such a position from Mr Geoffrey A Handley, a senior executive of Placer in Australasia. He has been described as General Manager, Corporate Development and Exploration in various documents and as Vice President, Exploration and Corporate Development for Asia Pacific (evidence of Mr Stewart, 27 November 2001, p 17). Mr Stewart then discussed that job with the worker and then sent him a memo on the stationery of PPNGX dated 16 July 1996 (exhibit 37). The subject of the memo was "District Officer-Melanesia". A copy of it was sent to Mr Handley. The substance of the memo is this:
Further to our recent discussions regarding the above, please find attached a draft job description that sets out the scope of work and terms and conditions as they currently stand along with some brief summary of our current activity. I have already garnered approval in principle in relation to the position from Geoff, however many of the details will still need to be ironed out. Please advise if you are interested and I will begin addressing some of the specifics. Obviously my immediate concerns centre around the following.
1. That the position fits your career objective and expectations and personal desire;
2. That you are not disadvantaged in relation to your current commitment with Misima Mines, and;
3. The benefit that the Sudest Project will receive by your immediate involvement and input on the project.
Toward that end, I would welcome an opportunity to discuss the job with you here in Moresby, providing it you can make suitable travel arrangements.
35. Very shortly after that memo, the worker flew from Misima Mines at Milne Bay to Port Moresby and met with Mr Stewart. The cost of that travel was charged to PPNGX (evidence of Mr Viant, 24 September 2001, p 7). Following upon that meeting, Mr Stewart wrote a letter to the worker, on the stationery of PPNGX, dated 18 July 1996 (exhibit 38). Copies of this letter were sent to Mr Handley, Mr Viant and the Resident Mine Manager at Misima Mines. The substance of that letter is:
Thank you for coming to Port Moresby on short notice to discuss the above. I would like to confirm the substance of our conversation and provide an outline for the immediate Scope of Work as agreed. The offer to assume the role of District Geologist is made under the following conditions:
1. You will remain based at and working under your current secondment contract with Misima Mines until such time as the assignment is deemed complete by Misima Mine Management and yourself. At this time, I understand that you will complete this by year end, 1996.
2. During this period, you shall assume a team leader role with Placer (PNG) Exploration's field partly on Sudest Island to the extent as you deem necessary to fulfil work programmes and meet the project objectives. In this capacity your direct involvement shall be limited to not more than 25% of your time and shall comprise management, liaison, technical support and direction to the field party. In this capacity, you are authorised to assign, direct and manage all Placer (PNG) Exploration employees as you deem appropriate.
Unit [sic] such time as your secondment at Misima is complete, and you have signed a contract to assume the position:
1. You shall not be responsible for any other activity, project or development but will be advised the same or order to become familiar with the scope of the position.
2. You shall not be responsible for management of accounts, legal contracts or administrative functions currently handled out of the Port Moresby office.
I will begin the looking into contract details as they impact your employment with Placer Pacific and will endeavour to complete the transfer or secondment by the end of the 3rd quarter. I trust this is satisfactory and enthusiastically welcome you to the group.
Please advise me in writing of any errors, omissions or misrepresentations of our understanding made at this time.
36. I have stated that the letter is dated 18 July 1996, and it is. However a subscription on each page of the letter has the date 19 July 1996. It appears to me to be more probable that the letter was actually sent on 19 July as, on that date, Mr Stewart faxed messages to Mr Hood, the Resident Mine Manager at Misima Mines, to the worker and to Mr Handley and Mr Viant that the worker had "agreed to accept a role with [PPNGX] in relation to the Sudest Project and that, in time, he will be transferred into the position of District Geologist-Melanesia". The fax message goes on to refer to a future "transfer arrangement". This fax message is exhibit 38.
37. Exhibit 37 refers to a "draft job description". No such document has been put into evidence. The evidence does contain a "Position Description" (exhibit 47) but that does not indicate that it is a draft. That document was sent to someone by fax transmission on the 28th day of a month in 1996, but that month is not reproduced on the exhibit. It was sent from the Indonesia Company. At the times to which I have referred in July 1996, Mr Stewart was in Port Moresby. Documents in evidence indicate that Mr Stewart was in Indonesia on 16 September, 24 October and 28 October 1996. Exhibit 47 was tendered immediately after two exhibits which are both dated 28 October 1996. Exhibit 45 (28 October 1996) is a "Confidential Facsimile Message" on the stationery of the Indonesian company, under the hand of Mr Stewart which attaches his "proposal regarding [the worker's] potential involvement at Misima in 1997" and also attaches the worker's job description. I infer, therefore, that exhibit 47, the "Position Description" is that applicable on 28 October 1996, rather than a draft presented to the worker on 16 July 1996.
38. The situation reached by 19 July was that the worker had agreed in principle to take up the role of District Geologist-Melanesia once his current secondment from PPML to Misima Mines Ltd had been satisfactorily completed. The position was to be "under" PPNGX. It appears that Mr Stewart was unclear as to whether this would be a "transfer or secondment" but it appears it was envisaged that there would be a "contract".
Steps leading up to the final drawing of the contract (exhibit 147).
39. My consideration of this issue is not to be taken as an acceptance by me that the original contract document (exhibit 147), a copy of which is exhibit 73, comprised the whole of the contractual relationship in question. Furthermore, I am acutely aware of the Parol Evidence Rule, as discussed in Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337. However it is necessary to analyse the pre-contractual dealings in order to ascertain both what constituted the contract and when it was made.
40. A first draft of the contract appears to have been made by the personnel department ("Human Resources Department" in Placer jargon) in Sydney before 24 October 1996 and send to Mr Stewart in Jakarta. Theoretically, Human Resources was part of PPML but most of the documents refer to "PPL", that is, Placer Pacific Ltd. The first draft is exhibit 44. On exhibit 44 are handwritten amendments and notes made by Mr Stewart (evidence of Mr Viant, 24 September 2001, p 8). The draft with Mr Stewart's endorsements was returned by him to Human Resources in Sydney by facsimile on 24 October 1996 (exhibit 43). That facsimile message he makes further comments on the first draft.
41. It should be noted that by 24 October, the following was envisaged:
1. The contract was between PPNGX and the worker;
2. The worker was to report to the "Country Manager", Mr Stewart;
3. The worker would remain in the PSSP and be covered for "Group Life Insurance" under PSSP;
4. A scheme equivalent to a 28 days on, 14 days off roster was proposed.
5. The worker's "point of origin" would be Sydney.
42. In exhibit 43, Mr Stewart said that he would provide a "brief outline of the scope of work" and send it by courier before the close of business on 25 October 1996. However, that does not appear to have occurred until 28 October, when Mr Stewart sent a fax (exhibit 45) to a gentleman at Misima Mines, to Mr Viant ("PPL, HR, Sydney") and to a Mr Garth Wilson ("PPL, Sydney"). A copy of his covering fax only was sent to Mr Handley. Enclosed were a memorandum "Phil Plibersek - 1997 Scope of Work" (exhibit 46) and the Position Description (exhibit 47). Exhibit 46 identifies the work which it was envisaged that the worker would do in 1997, including work at Misima Mines which would be "backcharged" for such work. The document contains this statement:
[The worker] will work a 28 days on, 14 days off roster, commuting from Sydney.
43. Exhibit 47 is headed thus:
POSITION DESCRIPTION
Position Title: District Geologist-Melanesia
Department: [PPNGX]
Classification: Staff
Location: Fly-in, fly-out Port Moresby
Point of Hire: Sydney
Roster: Four (4) weeks on - Two (2) weeks off.
44. The body of the document has four sections:
1. General Objective
2. Relationships
3. Nature and Scope of the Position
4. Qualifications.
45. Only two sections of the body of the document are currently relevant. They are:
2.1 Contract Administration: The contract management, approvals, policies and procedures will be administered by Placer (PNG) Exploration Pty Limited, on behalf of Human Resources, Placer Pacific, Sydney. The incumbent will report directly to the Exploration Manager, Indo-Melanesia in this regard.
2.2 Relationships Within the Company: Scope of work, reporting, and direct communication on technical matters will be developed with the Exploration Manager Indo-Melanesia. The incumbent will liaise with Exploration and Production Staff at Placer Mines, Resident Mine Managers, The Managing Director, Placer Niugini and the General Manager - Corporate Development and Exploration, Placer Pacific.
46. Mr Joseph SC and Mr Snell made much of clause 2.1. They submitted that it indicated that PPNGX was only acting as an agent of PPML. However, that would require me to read "Placer Pacific, Sydney" not as a reference to Placer Pacific Ltd but to PPML, which appears to me to be unlikely. In other documents Mr Stewart refers to "PPL, HR" meaning "Placer Pacific Ltd, Human Resources". Furthermore, in considering all the evidence it seems to me that the author of the document (probably Mr Stewart) has made a mistake by either using the wrong prepositions or transposing the names. The document itself makes more sense and actually accords with reality if it is read as: "The contract management, approvals, policies and procedures will be administrated for PPNGX by Human Resources, Placer Pacific, Sydney" or as: "The contract management, approvals, policies and procedures will be administered by Human Resources, Placer Pacific, Sydney on behalf of PPNGX".
47. Clause 2.2 is significant because it highlights a common usage in this case which causes problems for a lawyer. To a lawyer "Relationships Within the Company" means within PPNGX, but the clause refers to a number of companies. "The Company" in the heading of this clause clearly means Placer in the sense that I have set out at the commencement of this judgment.
48. A fax of 29 October 1996 from Mr Stewart (exhibit 48) contains this statement:
"Lynton [Viant] is currently preparing his [the worker's] contract which will form the basis. All Moresby oncosts will remain the responsibility of [PPNGX].
49. This fax was sent at 9:55am Jakarta time, that is 13:55, that is 1:55pm local time. At 3.00pm on the same day and again at 5:19pm on that day, Mr Viant sent by facsimile transmission the second draft of the contract. The facsimile coversheet and the second draft are exhibit 50. The second draft contains very few amendments to the first draft and, with one exception, those changes are insignificant. A new clause has, however been added (1.2):
"This contract will be effective from 1 January 1997"
The documents before me do not contain any immediate reply from Mr Stewart about this second draft.
50. It would appear that this draft was sent to the worker. The worker comments on it in a fax of 27 November 1996 (exhibit 54). An e-mail from Mr Stewart of 16 December 1996 to Mr Viant comments on the worker's contract (exhibit 57). Exhibit 57 refers to "Paragraph 8, Taxation". In the second draft, clause 8 refers to Taxation, in the final document Taxation is referred to in clause 7. Therefore, as at 16 December 1996, the document being discussed is still the second draft. The worker's fax of 22 November 1996 mainly raises questions relating to his remuneration under the proposed contract. The worker commenced his enquires (directed to Mr Viant) thus:
"It didn't dawn on me until just now that a contract may not be the appropriate vehicle with which to convey what should be described as "Conditions of Employment". Since I am on staff not on contract means that a lot of the stuff in "the Contract" goes without saying".
51. Mr Viant replied two days later on 29 November 1996 (exhibit 55). In answer to the above, Mr Viant said:
"Firstly I didn't really follow what you were driving at, however, I will explain to you the best way I can.
Every employee on staff receives a Letter of Understanding and contract which in turn describes the conditions under which they are employed. It describes briefly all the issues with the main body of the Human Resources policy manual describing in full detail the employment conditions".
52. Mr Viant then continues, dealing with the worker's questions about remuneration and pointing out how he will be better off financially.
53. The next relevant document is Mr Stewart's e-mail of 16 December 1996 (exhibit 57), clearly referring to the second draft. In the first paragraph he raises a suggested amendment to the Taxation clause. The next paragraph is:
"I talked with Phil, and he is now happy with the contract. He said he still needs to sort out his tax liabilities and the like but is planning on coming in to see you on Monday the 23rd to finalise. If this is not possible, please let Robyn Rich know and she can advise him at home".
54. Next to that paragraph has been endorsed in handwriting: "OK meeting with C&L Friday 20th December". "C&L" is a reference to Coopers and Lybrand, a firm of accountants retained by Placer to advise its employees (at Placer's expense) on matters such as taxation. The appointment was made by Human Resources to assist the worker. As to Mr Stewart's suggested amendment, a handwritten note next to it indicates that "International Policy" dictated the standard term in the second draft.
55. On 22 December 1996, Mr Viant sent an e-mail to Mr Stewart (exhibit 58). In the first paragraph Mr Viant makes the point that the taxation clause was standard and he did not propose to change it. In the second paragraph he said:
"Phil met with Coopers and Lybrand on Friday 20/12/96 at 3pm with a Ms Sutton, a very capable tax consultant".
56. It is clear that on 16 December, the worker was "happy with the contract", subject to advice on the question of taxation. That advice was given on 20 December and, it appears from subsequent events, that the worker was satisfied by that advice. As at that date Mr Stewart's only concern was about the taxation clause, on which his concern appears to have been allayed by Mr Viant on 22 December. Mr Viant, as Manager of Human Resources, was obviously happy with the second draft. The worker was expected to "finalise", that is, to execute the second draft on Monday 23 December. What happened on that day I do not know, but it is clear that the second draft was not the document finally adopted. A complication arose, not, it appears to me, from anything flowing from the worker, Mr Stewart or Mr Viant. That complication arose because of the requirements of the law or policy of PNG and, perhaps, to comply with Australian tax laws.
The PNG complication
57. The evidence discloses that the law of PNG required insurance for all risks in that country to be underwritten by insurers in that country (see exhibit 23). There was also a "training and localisation program" under which Placer had certain obligations to PNG. It was also necessary for the worker to obtain a work permit for PNG. Both Placer and the worker intended that the worker pay PNG income tax, rather than Australian income tax. One or a number or all of these considerations caused the complication I identified in the last paragraph. The oral evidence raises the same issues. Mr Viant said on 24 September 2001 at 13:
Q. What is the background about these written documents, vis-a-vis Papua New Guinea.
A. Because of the employment laws in Papua New Guinea, most - sorry, I should say, all contracts of employment with ex-patriots had to be duly stamped with a key and a stamp to register the document, so that actually showed that we were actually complying with the training and localisation program, so it is not unusual for a handshake to take place, but the contract not be signed for some time afterwards, especially those going into Papua New Guinea, because quite often you had a delay in them actually being allowed in the country because of work permits and the like, so quite often an employee was employed on contract terms or terms of employment before actually getting to their destination, and their contract being singed some time after.
Q. In order to get the tax benefits of being a non resident of Australia, that document would have to be registered as well.
A. Yes.
58. On the following day, Mr Viant was cross-examined by Mr Beauchamp (for the third respondent) to the effect that changes between the second draft and the first document were suggested by Mr Stewart. He replied thus, at 5:
A. No. They were brought, those changes were brought about because of the Papua New Guinean Government, back in those days said - and they changed in between the drafts 1 and 2 and the original in that insurances had to be covered by registered organisations within Papua New Guinea so therefore we could make no reference to insurances being paid in and out of or from Australia. They were omitted from a document but not from the policy.
59. Later at 8 he swore that the PNG Government required that the worker be taken off the Australian taxpayers' roll and be put on the PNG taxpayers' roll. At 9, he said that "the driving factor on this one was the PNG Legislation". In re-examination at 21, he stated that the worker's "Letter of Understanding" had to be acceptable to the PNG Government and be registered by it, so that it complied with the training and localisation program under which Placer was required to train young PNG citizens in geology. Evidence to the similar effect was given by Mr Stewart on 27 September 2001 at 9.
60. These considerations led to the drawing of the final contract. When it was drawn can only be inferred.
The final contract
61. Since it is a great significance to this case, I must quote in full the terms of the final contract (exhibit 147). The coversheet bears the title "Letter of Understanding between Placer (PNG) Exploration Pty Ltd and Phillip Plibersek". The substance of the document is:
1. GENERAL
1.1 This Letter of Understanding confirms our mutual understanding of the terms and conditions applying to your employment with Placer (PNG) Exploration Pty Ltd (the "Company") during your assignment in Papua New Guinea as District Geologist-Melanesia.
1.2 This contract will be effective from 1 January 1997.
1.3 Your reporting relationship will be to the Country Manager, Mr Ron Stewart.
1.4 This assignment is subject to medical clearances, securing of passports, government clearance and acceptance of the terms and conditions outlined in this agreement.
1.5 Except as provided herein, unless otherwise advised, administrative policies and practices of the company will apply.
1.6 Unless otherwise indicated, all amounts of money referred to are in Australian currency. Where allowances and benefits require an exchange rate calculation. The rate of exchange shall be that rate in use by the Company during the month in which the transaction took place.
2. COMPENSATION AND BENEFITS
All your compensation and benefits including the pilot incentive compensation program will be administered in accordance with Company policy, procedures and practices. The pilot incentive compensation program will have effect in the six months to the 31st December 1996 and will be reviewed as to its success and continuity.
2.1 Remuneration
Your total remuneration will be A$90,000.00 per annum, effective January 1st, 1997 paid monthly and will be subject to annual review. This salary includes all and every allowance due and payable whilst working for the Company.
2.2 Placer Staff Superannuation Plan
The Placer Staff Superannuation Plan is non-contributory with the Company continuing to pay 5% of your salary into the Plan on your behalf.
2.3 Group Life Insurance
You will be covered for Group Life Insurance whilst working in PNG through Kila Bowring. Should you go beyond a certain level of coverage, based on various factors, you may be required to provide details of your physical condition.
2.4 Salary Continuance Insurance
Under the Placer Staff Superannuation Plan you will continue to be covered for Salary Continuance Insurance that provides you with an income should you become disabled for various reasons. This coverage is subject to conditions of this Policy.
2.5 Motor Vehicle
You will be provided with a fully maintained company vehicle in accordance with Company policy whilst located and working from Port Moresby.
2.6 Medical/Dental Insurance, Extended Health Benefits
You and your family will continue to be provided with medical and dental insurance under the Placer Pacific Limited Employees Health Care Plan.
2.7 Worker's Compensation
During your period of employment with the Company, you will be covered for Worker's Compensation in relation to injury or disease ensuring directly from, or in consequence of your employment.
2.8 Stock Purchase Plan
You will continue to be eligible to participate in the Placer Pacific Stock Purchase Plan.
2.9 Leave Accruals
Entitlement to sick and long service leave will accrue in accordance with Company policy and existing legislation.
3. LEAVE OF ABSENCE
4.1 There is no entitlement to Field Break Days whilst on secondment to Place (PGN) Exploration Pty Ltd, however, where excessive time is worked time off may be arranged with approval of the Country Manager, Mr Ron Stewart.
4.2 All other leave shall continue to accrue in accordance with Placer Pacific Management Limited policy and procedure.
4. TRAVEL AND TRANSPORTATION
You will be covered in the event of death from any cause whilst travelling on Company business. Whilst working in an overseas location you will be covered by an appropriate Medical and Evacuation Insurance program.
5. EXPENSES
It is the policy and practice of the Company to make reimbursement for reasonable and acceptable out of pocket expenses incurred in connection with Company business and specified travel. Any such costs are to be properly documented and submitted for approval and reimbursement.
6. HOUSING
71. The Company will provide you with fully furnished accommodation. The standard or size of the premises provided shall be subject to the discretion of the Country Manager, Placer (PNG) Exploration.
72. The Company will pay for packing, shipping and insuring of up to 100kg of personal property for shipment from Sydney to Port Moresby. Upon completion of your employment with the Company the same policy will apply for your return to your point or origin.
7. TAXATION
Deductions from your salary for personal income tax contributions will be made by the paymaster each month and forwarded to the Internal Revenue Commission in accordance with legislation and Company procedures existing at the time. The filing of tax returns and maintenance of any relevant expense records shall be your responsibility, with the Company bearing reasonable costs for this service in each and every year of service covered by the letter of understanding.
8. EMPLOYMENT RESTRICTIONS
In accepting this position, it is understood that you will not engage in any employment, business enterprise, or activity that would, in any way, conflict with the interests of the Company or your position.
9. CONFIDENTIALITY
It is understood that the duties involved with the position will frequently make the incumbent aware of information, facts and intentions which are of vital importance to the Company and which may be of extreme interest to other parties. No information, facts or intentions are to be communicated to any person not authorised to receive them, except through or with the permission of the Company Secretary. It is understood that any breach of this requirement might result in the Company immediately terminating this Contract.
10. TERMINATION
It is understood that continuity of employment is based on satisfactory and responsible service to the Company. The Company reserves the right to terminate this Contract for unsatisfactory performance or for personal behaviour that, in any way, reflects adversely on the Company.
If your assignment is terminated abroad for any reason, or by expiry of the term of your assignment, the Company will pay moving expenses for you, your family and your personal property. Cost of shipping any personal goods that exceed the weight of that shipped at the start of the assignment will be for your personal account. Expenses to your point or origin will be paid providing your return to that point within 30 days of termination.
Notwithstanding the preceding paragraph, should you elect to terminate employment for a reason not acceptable to the Company, you will be paid your salary to termination date, plus statutory entitlements and accrued vacation time.
This Contract may be terminated by either side, on provision of one (1) month's notice.
11. SPECIAL NOTATIONS
In addition to those benefits contained in the above you will be entitled to local benefits listed below:
1. Telephone expenses of up to K100.00 per month.
2. Reasonable expenses for utilities, including gas, electricity and television services.
62. Mr Stewart has signed the document in blue ink and dated it 15 February 1997. The worker has signed the document in black ink and dated it 31 January 1997. The generation of this document appears to have been a matter of some urgency. A letter from PPML to Coopers and Lybrand of 7 December 1996 is exhibit 62. That sets out the steps necessary to obtain a PNG Employment Visa. This letter is from the Cairns office of PPML, addressed to the accountants' Melbourne office. The procedure was this:
When processing a PNG Employment Visa there are several steps which are taken.
1. A 'Position Number' which has been approved by the Dept of Labour & Employment, must be obtained from Margaret Mackinlay of Placer Niugini, Port Moresby. She has record of all 'open' and 'occupied' position numbers belonging to Placer.
2. The applicant's work permit application is to be processed first. The paperwork is couriered to Margaret Mackinlay, Placer Niugini, The Lodge, Bampton St, Port Moresby. She lodges this application at the Dept of Labour & Employment. The processing time of this paperwork is approximately 3/4 weeks.
The documents required are as follows:
a. Sponsorship Letter (draft copy enclosed)
b. 'Maintenance Guarantee' form (copy enclosed)
c. Resume
d. 2 x written references
e. 2 x certificates
f. Copy of employment Contract
g. Copy of Position Description
h. 'Work Permit Application' form (copy enclosed)
i. 2 x passport photos
Once the work permit has been approved, Margaret will fax me a copy of this approval which I will need to submit with the rest of the applicant's Entry Permit application. This is submitted at the PNG Consulate office in Cairns. The processing time of this paperwork is approximately 1/2 weeks.
Following is the documentation required:
a. Valid Passport
b. 'Request for Entry Permit' form (copy enclosed)
c. 1 x passport photo
d. 'PNG Medical Examination' form (copy enclosed)
e. Radiologist Report (written chest report)
f. HIV Test
g. Police Clearance
h. Work Permit approval (this is faxed down from Margaret)
The PNG Consulate input the application into their computer system which is downloaded to Immigration, Port Moresby for approval. Once the application is approved the authority to issue the entry permit (visa) is send back to the PNG Consulate and they issue the entry permit.
63. On 15 January 1997, Coopers and Lybrand (Melbourne) wrote to the worker confirming that they had received "a package of documents" concerning his PNG Visa from Judith Savage (PPML Cairns). The worker was advised that Jennifer Westen (second in charge of Human Resources, Sydney) had indicated Margaret Mackinley of "Placer New Guinea" would process the visa for him. (Exhibit 61).
64. On 16 January 1997, Jennifer Westen sent and inter-office memo to Mr Stewart attaching "3 copies of [the workers'] contract" and asking him to sign all three copies and return them to her "as soon as possible" (exhibit 63). What was enclosed, the evidence does not disclose.
65. On the following day, Ms Westen sent a fax to Margaret Mackinley of Placer Nigini Ltd asking her to telephone the worker to advise him of the requirements he needed to start work in PNG (Exhibit 64).
66. On 21 January 1997, the worker sent a fax to Robyn Rich who was Executive Assistant to Mr Handley. The substance of that fax is:
Could you please talk to Patti S in Cairns office to make sure she gets everything she needs for my work permit.
She is waiting on 2 written references and a contract. Please check with HR where my contract is an [sic] maybe fax a copy to Patti. I think Ron is yet to sign then I will too but maybe the PNG govt will accept an unsigned one.
67. Clearly there was still no contact on 21 January 1997, even though it appears to me that copies of the second draft had been in the original package of document sent to Coopers and Lybrand.
68. Exhibit 72 is another copy of the second draft, with handwriting on it. A note on the coversheet has been initialled by Kirsten Thomas, a secretary in the Human Resources Department. That endorsement raises some complications. It is not at all clear that all the handwriting on the coversheet is that of Ms Thomas. Of more significance, in my view, is that the handwritten notes in the subsequent pages of Exhibit 72 are in the handwriting of Ms Westen. The first page of exhibit 72 is the coversheet. The remaining pages are numbered at the top "Page 1" to "Page 5". At the bottom of Page 1 is the clause (2.2) referring to PSSP. At the top of page 2, before in clause (2.3) referring to "Group Life Insurance", Ms Westen has added "PNESP" - a reference to the Placer Niugini Expatriate Superannuation Plan, which was underwritten by a PNG insurer. Ms Westen has put a line through clause 2.3 and made a note "Kila Bowing" which is the name of the broker though whom the Group Life Insurance was effected in PNG. An arrow has been put in the left hand margin next to clause 2.4 (Salary Continuance Insurance). In the second draft that clause commences "You will be covered"; in the final document it commences "Under the [PSSP] you will continue to be covered". Next to clause 2.6 (Medical/Dental Insurance, Extended Health Benefits) have been added in the left hand margin a note "Expat" with an arrow and above the word "be" has been written "continue". In the second draft that clause commences: "You and your family will be provided". In the final document the corresponding clause commences: "You and your family will continue to be provided". In the second draft the clauses numbered 5 relate to "Travel and Transportation". Next to clause 5.2 a cross has been placed in the right-hand margin and in the left-hand margin some words have been written, part of them is obscured in the copy document which is exhibit 72. One of those words appears to be "complications", although it might be "implications". In any event, the corresponding clauses in the two documents (that is, the second draft and final document) are quite different. The inference which I draw is that Ms Westen was the draftswoman of the final document.
69. Exhibit 66 is an inter-office memo on the stationery of Placer Pacific Ltd from Ms Westen to the worker. It bears date 31 January 1997, the same date as inserted by the worker in the final document. The following is the substance of the document:
Following is the agreement between the Company and yourself:
1. Your point of origin is designated as Sydney, New South Wales, Australia.
2. The week roster or cycle of work shall consist of four (4) weeks on then two (2) weeks off ie 28 days of work, 14 days off work. The hours of work shall be determined by the needs of the project with no less than a working day of 10 hours being worked whilst in the filed with the minimum office hours in Port Moresby being 8am to 5pm.
3. Travel expenses to and from your point of origin and Port Moresby will be met by the Company.
4. The Company will be responsible for all reasonable costs of transport to and from your Point of Origin at the beginning and end of each work cycle during the seconded period of work.
5. Travel time taken to and from your point of origin to Port Moresby at the beginning and the end of your cycle of work shall be in company time.
70. Each of the numbered paragraphs in this document is a clause of the second draft which has been omitted from the final document:
Paragraph of Exhibit 66 Clause of Second Draft
1 1.5
2 3.1
3 3.2
4 5.1
5 5.2
71. The inferences which I draw are these. As I have just stated, Ms Westen was the draftswoman of the final document. When she presented it to the worker, it did not contain clauses which had previously been agreed to by Mr Stewart, Mr Viant and the worker. Those clauses could not be inserted in the final document because of the "PNG Complication". The worker was handed exhibit 66 to show him that they were still part of the agreement, even though not contained in the final document. 31 January 1996 was a Friday. The worker was at work at Placer's officers in Goldfields House at Circular Quay: see exhibit 68. That is where Human Resources, Sydney was based, where Ms Westen was based. Ms Westen on that day provided the final document and exhibit 66 to the worker, and he signed the document. Alternatively, Ms Westen presented the final document to the worker, he drew attention to the missing clauses and Ms Westen then generated exhibit 66. It is to be recalled that there was urgency: the "contract" was needed to obtain the worker's work permit and visa from the PNG authorities. I am persuaded, in particular, by exhibit 66 that the worker executed the final document on the day he dated it, 31 January 1997 at Goldfields House at Circular Quay.
72. There are a number of other considerations which led me to this view:
1. The principle or doctrine of regularity: omina praesumuntur rite esse : see Illawarra Paving Pty Ltd v Simone (1995) 11 NSWCCR 529 at 536.
2. As I have already pointed out, the worker had not previously backdated contracts. The respondents submitted that the worker had backdated the contract to protect his tax status as a non-resident of Australia, relying on exhibit 67, a fax from the worker dated 3 February 1997, enclosing his timesheet for January 1997, addressed to Mr Game in Perth, with a copy to Ms Westen in Sydney. However, it is clear from that document that the applicant's tax status was to change on 1 February 1997. If backdating were to occur, 1 February 1997 would be a more likely date. In any event, exhibit 115 suggests that the worker's tax status was changed with effect from 1 January 1997, the day on which the final document says that it took effect.
3. Ms Westen was not called, nor was her absence explained. There is nothing to suggest that she could not be called by Mr Beauchamp or, if Mr Rares SC so decided, by him.
4. There were a number of other potential witnesses who might have been able to say when the contract may have been signed, for example, Kirsten Thomas who wrote on the coversheet of exhibit 72, the person(s) at Coopers and Lybrand to whom document had been forwarded for processing the visa application, Judith Savage of PPML Cairns to whom I have referred above and Margaret Mackinley of Placer Niugini Ltd who was processing the visa for the worker. None of these were called and the absence of any of them was not explained.
73. The evidence which might point in another direction are the handwritten notes on the coversheet of exhibit 72. The submission made to me was that they ought be construed as indicating that as at 10 February 1997, the second draft was still being considered. If that were the case, I would expect Kirsten Thomas to have been called, but she was not, nor was her absence explained. It may be that the second draft was faxed to Mr Stewart on 10 February 1997, in the erroneous belief that that was the contract when the actual contract was in transit by courier to Mr Stewart in Jakarta or had been lodged with the PNG authorities for processing the worker's work permit and visa. In light of the other evidence, of the equivocal nature of the endorsements on the coversheet of exhibit 72 and of the failure to call Ms Thomas, I am not prepared to draw the inferences, urged upon me by learned Counsel for the respondents.
74. The respondents also relied on exhibit 69, a fax from Robyn Rich, Executive Assistant to Mr Handley, to the Cairns office, dated 5 February 1997. The fax comprised nine pages including the coversheet. The other eight pages were said to be exhibits 70 and 71 (references) and exhibit 72. That raises another problem. If exhibit 72 was in a fax to Cairns on 5 February, how could exhibit 72 have a note on its coversheet dated 10 February, unless it were subsequently altered? Ms Rich was sending documents to the Cairns office to assist in obtaining the worker's work permit. The substance of exhibit 69 is this:
"Finally, I have references and Phil's Letter of Understanding (alas unsigned to date). Hope you can work any miracles possible."
If Ms Rich was using the second draft it is not surprising that it was unsigned. The worker had signed the final document on 31 January and Ms Rich may have been unaware of its existence. If she were dealing with the final document, "unsigned" might mean "unsigned by Mr Stewart". Neither Ms Rich nor the addressee of this fax (Patti S) was called nor was their absence explained. Again I am not prepared to draw the inferences which the respondents ask me to do.
Conclusions on the contractual issues
75. I have already found that the worker signed the final document, the "contract", exhibit 147, in Sydney on 31 January 1997. That document, however, was not the full agreement between PPNGX and the worker. The full agreement is comprised by exhibit 147 (which does not purport to be exclusive), exhibit 66 which contains clauses which could not be contained in exhibit 147, and the "administrative policies and practices" of Placer (exhibit 147, clause 1.5, clause 2, clause 2.9, clause 5 and clause 7) which it was clearly intended were to apply. These were referred to by Mr Viant as the "personnel management policy", a "thick manual" (Transcript, 24 September 2001, p 10).
76. When was this agreement reached? Exhibit 147, clause 1.1, like other Placer "contracts" purports to confirm "our mutual understanding", that is, a prior oral agreement. Both Mr Viant and Mr Stewart acknowledged that the terms of the agreement had been reached prior to the execution of exhibit 147. However, I could not find such an earlier oral agreement without evidence that the worker was aware prior to 31 January 1997 of the "PNG complication". In my view the worker's full assent was only given on 31 January 1997 when he signed exhibit 147 and was handed exhibit 66. Mr Stewart's assent was not endorsed on exhibit 147 until 15 February 1997, when he was in Jakarta.
77. Was the agreement made on 31 January 1997 or 15 February 1997 or at some later time when the worker became aware that Mr Stewart had executed exhibit 147? I find that the agreement was made on 31 January 1997. My reasons for so finding are these:
1. Officers of PPML or of Placer Pacific Ltd, of the Human Resources Department, were acting on behalf of PPNGX. It is clear from exhibit 58 (fax of Mr Viant to Mr Stewart of 22 December 1996) that Human Resources had the "final say" as to what was to go into each "Letter of Understanding". When the worker signed the Placer Document, nothing more need be done. Its execution by Mr Stewart was a mere formality. He does not appear to have authority to vary a document settled by the Human Resources Department. Agreement (oral) of the main parts of the final agreement had been reached by 16 December 1996 (see exhibit 57, fax from Mr Stewart to Mr Viant: "I talked with Phil, and he is now happy with the Contract"). The form and the detail were left to Human Resources which clearly had authority to settle the final document and proffer it to the worker.
2. In fact, the worker had already commenced duties for PPNGX. His timesheet for January 1997 shows him as doing "PNG Generative" work on 29, 30 and 31 January 1997, as Mr Stewart acknowledged (Transcript, 27 September 2001, p 22). On the day the worker signed the contract he was working for PPNGX and continued to do so thereafter.
3. On 5 February 1997, the worker left Sydney on Flight PX4 (exhibit E) to go to Port Moresby, to take up residence in that city and to commence doing the work there that the contract called for. PPNGX provided to the worker the airline ticket to enable him to make the flight. This can be taken as an affirmation by it that the contract was on foot. Alternatively, if the view be taken that the worker's signing of exhibit 147 were an offer, rather than an acceptance, the PPNGX accepted that offer by providing to the worker the airline ticket that enabled him to board an aeroplane in Sydney on 5 February 1997 to enable him to travel to Port Moresby to take up work in PNG. This is analogous to Cramp v Commonwealth (No 1) (1995) 12 NSWCCR 312 at 318-9.
78. Before turning to the next issue, I must say something further about exhibit 66, in light of the submissions made by Mr Rares SC who cited Codelfa (supra) as authority for the proposition that the Court would not infer or imply terms in a contract that the parties had deliberately omitted. That is a correct statement of the law. Mr Rares argues that the parties having omitted clauses from exhibit 147, I could not then accept that exhibit 66 contained contractual terms. However, I am not implying contractual terms. I have accepted that the full agreement between the parties includes both exhibit 147 and exhibit 66. Exhibit 66 on its face purports to be contractual and accurately records what actually occurred after 31 January 1997. The worker's commuting between Port Moresby and Australia can be seen from exhibit E and there is no suggestion that it was not done at the expense of PPNGX. The worker's time sheets for the months of April to August 1997 (exhibit 139) also shows the work cycle of 4 weeks on, 2 weeks off.
79. The applicant's proposition that the worker remained an employee of PPML exclusively collapsed when Mr Joseph SC accepted that the relationship of the worker and PPNGX was not a sham. He submitted that the worker nevertheless remained an employee of PPML, that he was an employee of both PPML and PPNGX. I am unable to accede to that submission, for a number of reasons:
1. The fact that PPML continued to organise the worker's salary payments is merely consistent with its role in the Placer Australian group. The evidence clearly establishes that the moneys to pay that salary were coming from PPNGX.
2. The fact that many benefits of the worker "continued" under the agreement with PPNGX does not mean that the worker's contract with PPML continued. The worker had those benefits because PPNGX promised to continue to pay them. Similar promises were considered in Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506 (HL) and Re Willow Fashions (Australia) Pty Ltd (in liq) (unreported, VSC, Hayne J, 7 April 1995, 7628/94).
3. If the worker's contract with PPML persisted, he was still entitled to his salary under it, as well as his salary from PPNGX. It is clear that he did not receive both and the evidence does not suggest that he had any such expectation. Indeed, the evidence is all one way: the parties (meaning the worker and Placer) accepted that the new "contract" with PPNGX would replace the contract with PPML. The same thing happened in 1993, when the third contract was replaced by the fourth contract.
4. As I have already mentioned, Mr Joseph SC made much of the contract with PPML being "permanent". I have already dealt with that argument. True it is that there is no written, nor evidence of any oral notice of termination of the contract with PPML, but parties can waive such formal notice, which is what happened here, as it had in 1993.
5. The opinion of Mr Viant that the contract with PPML persisted has no weight. He was a personnel officer, not a lawyer. He clearly was perplexed by the worker's relationship with Placer. I accept that he did his best to tell me the truth, but his opinion cannot override hard evidence and the legal process of the construction of documents.
6. Whilst the agreement with PPNGX was not expressed to be "permanent" it was another indefinite contract. The evidence does not disclose for how long it was envisaged that the worker work in PNG but I note that his visa as a "working resident" was valid until 16 February 1999 (on exhibit 137). In light of the fact that the contract with PPNGX was indefinite, it is unlikely that the parties intended that the earlier contract persist.
80. I conclude that the worker's contract with PPML was terminated when he entered into his contract with PPNGX.
Schedule 1, Clause 1
81. I have found that from 31 January 1997, the worker was employed by the second respondent, PPNGX. The applicant argued that, if so, the worker's service had been "temporarily lent or let on hire" so that he remained for the purposes of the Act a worker employed by the first respondent, PPML. In light of my last finding, that the worker's employment with PPML was terminated when he entered into his contract with PPNGX, the applicant's claim under Schedule 1, cl 1 must fail.
82. In Murphy v Henderson & Glass and anor (1930) 23 BWCC 91 Lord Hanworth MR said at 98:
The relevant part of the section is this: "Where the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, the latter shall, for the purposes of this Act, be deemed to continue to be the employer of the workman whilst he is working for that other person". Observe, the first thing to determine is this: Was there a contract of service with one person? Was there a subsisting contract of service at a time when the workman is temporarily lent or temporarily let on hire to another person by the employer with whom the workman has entered into a contract of service? If the facts are such as bring the case within that section so amplified, then the employer with whom there is a contract of service is to be deemed to continue to be the employer of the workman while he is working for the other person. I think it is agreed on both sides that the word "temporarily" applies both to "lent" and to "let on hire"; but the first thing to see is, Is there a contract of service which is a continuing contract as contrasted with the temporary lending or letting on hire of the workman? If there is, then the mere temporary lending or letting on hire of the workman to another person will not prevent the liability of the employer with whom there is a subsisting contract of service.
83. This was adopted by the High Court in Fogarty v Dowerin Road Board (1935) 53 CLR 510. A joint judgment was given by Rich, Dixon, Evatt and McTiernan JJ. At 514 their Honours said:
When the services of the worker are lent by the employer, the work he is lent to do is for the time being the measure of his duties. His employment by the borrower, in other words, must be regarded for the purpose of ascertaining whether an accident arises out of or in the course of his employment. But, in any case, amongst the duties which the Road Board employed the appellant to perform was the repair of its motor vehicles. In most cases arising under the provision for the loan of services the difficulty will be found to lie in determining whether the services of the worker have in fact been lent by the employer, or have become available to the other person without any loan, either because there has been a termination of the first employment, or because the employer has not authorised the performance of the work, or for some other reason. The loan of an employee's services is not a transaction which the law precisely defines. It is rather a popular than a legal conception. The services of a worker may be lent although he is to be paid by the borrower (Reed v Smith Wilkinson & Co. (1)). The important consideration is whether the contract of service with the original employer continues. If it subsists and is a continuing contract, the diversion of the worker's services by or under the authority of his employer may amount to a temporary loan (Murphy v Henderson & Glass (2)). Consistently with the loan of services he may come under the direction and control of the person borrowing his services and that person may deal directly with him in respect of wages (Murphy v Henderson & Glass (1)). Indeed, a loan upon terms that the borrower pays the wages and controls the performance of the work may be considered typical of a lending. The Act distinguishes between letting on hire and lending. The first will usually involve a payment to the employer who lends. The second will not, and, therefore, unless the employer who lends is prepared to bear the cost of the work, a direct payment to the employee may be expected.
84. Since I have found that there was no continuing contract with PPML, there can be no lending or letting on hire. The applicant's claim against the first respondent must fail. The situation would, of course, have been otherwise if the worker had been injured during the period of his contract with PPML when on secondment to, for example, Misima Mines Ltd or the Indonesian company.
Election
85. Since on my findings, the applicant is not entitled to an award against the first respondent, I do not need to deal with this defence pleaded by the first respondent. I shall briefly record what the argument was. Under PSSP there was Group Life Insurance. Under PNESP there was also Group Life Insurance. The death benefit under PNESP was 5 times the worker's annual salary, that is, $450,000. It appears that the benefit under PSSP was similar. After the worker's death, a claim was made by Placer upon PNESP and the death benefit was paid to the worker's estate.
86. Workers Compensation benefits under PNG law were very small. According to Mr Trainor the death benefit was K25,000 equivalent to $14,000 or $15,000. Because of the perceived inadequacy of the PNG scheme, PPNGX and other PNG Placer Companies had a Personal Accident Policy to provide additional cover to their employees. This was referred to as a "top up" cover but it was not limited to legally compensable conditions. It covered any accident or sickness befalling employees of the PNG companies. After the worker's death, Placer claimed on that insurance and the proceeds of that claim ($512,187) were paid to the worker's estate.
87. Mr Rares SC argued that by accepting those moneys from PPNGX, the applicant had elected to treat it as the worker's employer and could not now assert that PPML was the worker's real employer. He cited the following:
Scarf v Jardine (1872) 7 AC 345
Khoury v GIO of NSW (1984) 165 CLR 622
Champtaloup v Thomas [1976] 2 NSWLR 264
Sargent v ASL Developments Pty Ltd (1974) 131 CLR 227
Craine v Colonial Mutual Fire Insurance Company Ltd (1920) 28 CLR 305
The Commonwealth v Verwayen (1990) 170 CLR 394.
88. It appears to be settled law that where the rights in question arise under a contract:
(a) the parties are deemed to know their contract;
(b) the knowledge of their solicitors is imputed to them; and
(c) there is no need to show detriment flowing to the other party.
89. The questions which would have arisen are:
(a) what was the extent of the applicant's knowledge of her husband's status;
(b) could the knowledge of the solicitor acting for her as adminstratrix of the worker's estate be imputed to her in her other role as dependent widow of the worker;
(c) was it necessary to show detriment flowing to PPML?
90. Fortunately, I do not need to decide those questions. I understood Mr Beauchamp, for the third respondent, to adopt those submissions, but he is in a very different position to Mr Rares SC. Assuming the workers compensation law of PNG to be similar to that of this State, the payments under the two insurance policies could not prevent an award being made under PNG law. If the applicant be entitled under s13 to an award under the law of this State, recovery of these insurance moneys does not inhibit.
Section 13
91. Section 13(1) provides:
If:
(a) an employer has a place of employment in New South Wales, or is for the time being present in New South Wales, and there employs a worker; and
(b) any such worker while outside New South Wales receives an injury under circumstances which, had the injury been received in New South Wales, would entitle the worker to compensation in accordance with this Act,
the injury is an injury to which the Act applies, and compensation is payable accordingly.
92. Subsections (2) and (3) are not currently relevant. The applicant has not claimed compensation under the law of PNG.
93. I have already found that the contract of service with PPNGX was made in this State on 31 January 1997. Leaving aside the compensibilty of the worker's death, the only remaining issue is whether PPNGX was "for the time being present in New South Wales". Companies are legal fictions. They can only be present by their officers, servants or agents. Clearly the Human Resources Department (whether it be part of PPML or Placer Pacific Ltd) was an authorised agent of PPNGX for dealing with personnel matters and payroll matters and other administrative matters. Mr Viant and Ms Westen were employed by Human Resources for personnel matters. Did they have authority to bind PPNGX?
94. Clearly, Ms Westen did, because she signed exhibit 66 setting out "the agreement between the Company and yourself" which I have found to be a contractual document. If the authority were not actual it is at least ostensible.
95. In Duic v Dillingham Corporation of New Guinea Pty Ltd [1972] 3 NSWLR 266, the employer was not incorporated in NSW nor registered in NSW as a foreign corporation. According to the case stated in the month of April 1969, the respondent was present in NSW by its servant or agent in NSW and there employed the worker. Duic travelled to PNG and was injured there. Compensation was awarded.
96. In Compagnie des Chargeurs Caledoniens v Weir [1980] 1 NSWLR 573 the employer was a French company, not registered in this State. It had appointed Hetherington Kingsbury Pty Ltd to be the general agent for the ships which the employer owned or controlled and which carried goods and passengers between Sydney and Noumea and the surrounding islands. Weir sought work from the agent and was referred to the captain of one of the employer's ships when it was in Sydney. The captain of one such vessel engaged Weir as a ship's officer in Sydney. It was held that the employer was present in Sydney at the time the contract was made. Mahoney JA (as he then was), which whom Reynolds and Glass JJA agreed, said at 578:
A person may be "present in New South Wales" if, in the relevant sense, he himself carries on business in New South Wales; or, if he employs an agent to that end, it is he, and not the agent, who carries on the business. It is not necessary to detail what the agents did in this case, or to detail the terms of the agreement which governed their relationship with the appellant. The agreement, it is accepted, remained in force at the relevant time. I think the terms of the agreement, and the evidence as to the things the agents did for the appellant, and the circumstances in which they did them, warrant the conclusion that the appellant was in New South Wales at the relevant time. But, in addition, the appellant's ship was here at the relevant time, and the captain of it, acting within his authority (it was not suggested to the contrary) employed the respondent to work on the ship. If the question be one of fact, it is, in my opinion, one which properly should be decided in favour of the respondent. It was open to the judge to find as he did.
97. Ms Westen was an agent of PPNX when she put the final document (exhibit 147) before the worker and gave him exhibit 66. I have no hesitation in finding that on 31 January 1997 PPNGX was present in NSW by its agent, Ms Westen. Therefore, the applicant's claim can succeed under s13.
Non-insurance of PPNGX
98. On 1 June 1998, the solicitors acting for the worker's estate (Messrs Willis and Bowring) wrote to Placer (PNG) Pty Ltd at Goldfields House (exhibit 123). The letter is headed:
"The late Phillip Plibersek
Application for Workers Compensation"
99. The first paragraph recites that that firm acted "for Wendy Meeson, the widow of [the worker]". The second paragraph asks for the name of the workers compensation insurer as at 4 October 1997 and asks for the correct name of the employer and its ACN as the solicitors had documents suggesting three names: Placer (PNG) Pty Ltd, PPNGX and Placer Pacific Ltd. Mr Trainor as "General Counsel, Placer Pacific Ltd" replied (exhibit 124) that the worker was employed by PPNGX and its workers compensation insurer was American Home Assurance of Port Moresby. The applicant appears to have instructed Messrs Carroll and O'Dea a short time later. Exhibit 127 is a fax message from Mr Trainor to Carroll and O'Dea of 9 September 1998, referring to earlier telephone discussions and gives the same information that had previously been given to Willis and Bowring. On 11 September 1998, Carroll and O'Dea wrote to Mr Trainor (exhibit 128) advising that in their view the applicant had a claim under the law of NSW and asking for the details of "the company's" NSW Insurer. The only letter before me which might be a response to exhibit 128 is a letter from Mr Trainor to Carroll and O'Dea of 22 December 1998 (exhibit 129) although there would appear to have been correspondence in the interim. Mr Trainor's response is a classic piece of obfuscation:
Further to your recent correspondence we enclose herewith a worker's compensation claim forms forwarded to me from Papua New Guinea.
Having discussed your request for details regarding the Placer group companies referred to in your letter of 17 November, 1998 with our insurers, we have been advised that as Mr Plibersek was employed pursuant to a Contract of Employment with Placer (PNG) Exploration Limited any claim for workers' compensation would be made against that company and not against any of Placer's Australian companies. Accordingly, we have enclosed the claim forms from Kila Marsh McLennan in PNG for completion on behalf of the Estate of the Late P Plibersek.
Should you wish to discuss the above, please contact the undersigned.
100. Mr Trainor, a solicitor, General Counsel for the Placer Group in Australasia, a director of PPNGX at the time of the worker's death (see exhibit 125) failed to disclose PPNGX's NSW worker's compensation Insurer. The third respondent has admitted (Transcript 28 September 2001, p 72) that it advertised for an insurer of PPNGX as required by the Act but did not receive any reply from any licensed insurer. I have no hesitation in finding that PPNGX was uninsured for its liability under the Act as at 4 October 1997.
101. This is not a "hard luck" case. The simple fact is that PPNGX ought to have been insured under the Act. The worker worked for it in Sydney on numerous occasions as one can see if one compares the worker's time sheets (exhibits 135 and 139) with the worker's movements to and from Australia (exhibit E). He also attended a training course at North Sydney and the evidence discloses that on one occasion, in the course of his employment, he visited the offices of CRA in Melbourne, which raises the question as to whether PPNGX had insurance under the Victorian scheme. It may well be that other employees of PPNGX (for example, Mr Stewart) were required from time to time to work in NSW. One wonders why a NSW policy was not obtained in the name of Placer Dome Inc and its subsidiaries. An answer to that might be that the Insurance Premium Order requires that premium be calculated on the basis of all wages paid to all employees. It ought not be beyond the ability of a competent draftsman, an underwriter and an actuary to develop the concept of a "NSW payroll" to which a percentage loading could be added for those not on that payroll who might from time to time work in NSW, that is, the case of multi-jurisdiction employers.
102. If the applicant be entitled to an award against the second respondent, it must be paid by the third respondent under the ULIS.
Circumstances surrounding the worker's death
103. Clause 6 of the contract (exhibit 147) concerns "Housing". The sub-clauses are numbered 7.1 and 7.2, reflecting the numbering of the second draft, indicating to me the haste in which exhibit 147 was drawn. Clause 7.1 is a promise by PPNGX to provide the worker with "fully furnished accommodation". That accommodation was at "The Lodge", Bampton Street, Port Moresby ("the Lodge"). PPNGX (perhaps all the Placer companies in PNG) had an office in the second floor. The accommodation provided to the worker was on the fourth floor. The "Managing Director" of the Placer in PNG had an apartment on a higher level of the Lodge. The Lodge was in a central business district of Port Moresby.
104. The Lodge was provided with some security, but was not in what was described as a "compound". According to the applicant a "compound" had this security:
Electrified gates, electrified fences, more than one security guard on the gate. Security guards patrolling the area. Dogs. The request of identification on entry through the gates of the premises. Barbed wire on top of the fences. Very heavy duty fences.
105. The Lodge had a perimeter fence, but it was not electrified. The front gates were illuminated at night, but the rest of the perimeter fence was not. There were no guard dogs. Security guards were situated at the entrance but, according to the applicant, they were not present all the time. Sometimes a guard might be asleep at his desk. The gates were usually left open. It was not necessary to produce identification to enter the building, but it was necessary to have a security device to access some of the floors. The fire doors were unlocked. The evidence of Mr Trainor was that the security guards stood watch 24 hours per day, which is inconsistent with the applicant's evidence. However, Mr Trainor's credit worthiness was attacked, with some success, and I prefer the applicant's evidence on this point. Mr Trainor was certainly not impartial.
106. The applicant had stayed at the Lodge on two occasions. The first visit was for two weeks and about 2 weeks had elapsed on her second visit when the worker was killed.
107. There had been earlier burglaries. One was of the worker's apartment. Exhibit N refers to this event. The burglary was detected on 13 July 1997, when the worker returned from a "field break" in Australia. There was no forced entry. Employees of the former managing agents of the Lodge were suspected to have kept master keys to the building and to have entered the worker's apartment with a key. Items belonging to both the worker and "the Company" were stolen. The applicant was aware of a break in on the sixth floor and also of one on another floor of the building. The burglary on the sixth floor had been effected by someone climbing up a drain pipe and entering via a bathroom window. The "hi-tech" solution to that problem was to oil the drain pipe with axle grease! The inferences which I draw are that burglary was a foreseeable problem at the Lodge and that there were more robust measures available to secure the building. However, this is not an action in negligence.
108. There is much evidence before me of perceived security risks in Port Moresby. There are Consular warnings between 8 November 1996 and 12 March 1999 (exhibit M), a "Report on homicide rates in Port Moresby" by Ms Anou Borrey, a criminologist who has worked, lectured and researched in PNG (exhibit F) and a report by Mr RW Jennings, a licensed Security Consultant (part of exhibit 41). The Consular advice applicable at the time of the worker's death is dated 13 August 1997. It contains this:
In view of continuing instances of violence, including murders associated with robberies and rape, Australians travelling to Papua New Guinea are advised to exercise extreme care and maintain a very high level of security awareness.
109. Ms Borrey makes the point that official statistics are unreliable. She makes the point that incidents of rape and break and entry increasingly involved the use of violent actions inflicting serious bodily injuries. She then offers reasons why that might be so. This observation is consistent with the Consular warning. She concludes thus:
While (because of the absence of reliable statistics or other "hard data") it is not possible to categorically state that the rate of crime is higher in PNG than Australia, there are sufficient indications within the community that there is a high level of risk.
· Public transportation after 6pm is non-existent. The bus drivers and customers feel unsafe to be on the road after dark. Just recently (February 2000) bus drivers have halted services for a particular area in Port Moresby due to increased attacks on buses and harassment of passengers at the bus stop.
· Security business has been booming in all urban centres of the country.
· Security fences have been erected around most houses and compounds.
· Transportation in and out the city is often organised in the form of convoys to increase the security level.
· International organisations consider Papua New Guinea as a high-risk area and therefore often include "danger" money in the payment packages of their employees.
Considering the relatively high level of violence, the inefficiency of the formal law enforcers to prevent and record incidents of crime, and the specific security measures taken by the majority of community members, once can on the balance of probabilities state that the risk or likelihood of homicide in PNG is higher than the risk or likelihood of homicide in Australia.
110. Mr Jennings was "briefed" with both PNG and Australian press clippings. Some of those are inaccurate, according to the evidence before me. For example, a clipping from the Daily Telegraph of 6 October 1997 describes the Lodge as "a fortress-like high security apartment building". The applicant denied that it was and, objectively, in my judgment it was not. The same article suggests that theft did not appear to be the motive, but it was. The article contains a photograph of a guard at a gate in security fencing, which neither the applicant or Mr Trainor recognised as being part of the Lodge. Mr Jennings confirms the observation of Ms Borrey that official statistics are unreliable. Mr Jennings says this:
It is true to say, that a large proportion of the crimes in Port Moresby are directed at tourists or foreign business persons resident in the country on a temporary basis. This is because the PNG citizens may be categorised as being on a far lower economic structure to the 'westerners' and have little worth stealing. The only aspect of the brutal crime of the rascals, which does have a major effect on the indigenous population, is the 'pack rape' phenomena. The foreigners are much more likely to have cash, watches, cameras, electronic equipment, jewellery, and other valuables which are very easily disposed of on the black market for reasonable rewards, which form the target for the criminals.
In relation to crimes involving stealing from homes, robbery, home invasion and such, it is reasonable to classify the vast majority of such crimes in the cities of PNG, under the same "brute force and ignorance' skill level, as displayed by the rascal gangs. They will smash open doors or windows, charge in, in numbers, armed with firearms, seriously assault the occupants (particularly the females) and remove any property of value.
111. However, Mr Jennings distinguishes the crime in which the worker was killed. He expresses the opinion that crimes involving planning, technical skills and some level of sophistication are very rare in Port Moresby, quite probably because there is no necessity to learn or use such skills. He later said:
In relation to the methodology used by the offender, in breaking into Mr Plibersek's apartment, I would state that the phenomena of persons managing to circumvent high steel security fences and entry codes, to scale the outside of a building to level 4, enter and presumably steal, would be very rare in any city in the world. One may consider such a crime to be more appropriate to the high rises of 5th Avenue in New York, Mayfair in London, or Point Piper in Sydney, although in my experience, even in those places, such crimes would be very unusual.
112. In this regard, one must consider a clipping from a PNG journal, the Post Courier of 25 March 1998 which commences:
A Gulf Province man yesterday pleaded guilty at the National Court to last year's murder of an Australian geologist at a high rise apartment block in Port Moresby.
Haihavu Kore, 23 years of Ihu was charged with one count of the murder of Philip Plibersek, 37, of Sydney.
Judge Kubulan Los told Kore, the court will pass sentence against him on the third week of April with the exact date to be confirmed. Kore was dubbed the 'cat burglar' by police for doing the impossible, scaling four floors up the outside of "The Lodge", a high security, brick building in downtown Port Moresby at about 2am last November.
He walked along the balcony and opened an unlocked sliding door of the victims' unit which had been left open to let in the cool sea breeze.
113. I have some difficulty in understanding how much "planning, technical skill and level of sophistication" is required to climb over a perimeter fence, to scale a drain pipe, to walk along a balcony and to push further open a sliding door that had been left open to admit the breeze. Only physical fitness would be required, in my view. I shall deal with the Fifth Avenue, Mayfair and Point Piper opinion shortly. There is no evidence as to how the intruder actually scaled the building. The earlier burglary on the sixth floor was by climbing up a drain pipe. However, there is no evidence of any sophisticated means used to scale the building such as rockclimbing equipment or ropes. A more simple means of ascent is to be inferred in light of the lack of such evidence.
114. On this evidence I conclude that, relative to Australia, living in Port Moresby carries an increased risk of personal injury to the victim of robbery or burglary and that there is an increased risk of the latter to a westerner, such as the worker, because of his perceived wealth relative to that of PNG citizens.
115. Total average earnings for adult males employed full time in Australia were in August 1997 $835.30 and in November 1997 $848.40. These represent annual salaries of $43,435.60 and $44,116.80, that is, approximately half of the worker's annual salary. By Australian standards the worker's income could be described as "comfortable" but he would by no means be described as a "high earner" or "well off". In Australia he lived in Newtown, an inner western suburb of Sydney once considered "down at heel" but now undergoing gentrification. Newtown is not to be compared with Point Piper, Double Bay, Bellevue Hill, Mosman or Palm Beach. The worker, residing in Newtown, was a very unlikely victim for a "professional" cat burglar. However, in Port Moresby he would be considered a "high earner" and "well off" by local people. To these people his apartment would be expected to contain many valuable things. If the murderer were a "professional" cat burglar, the worker was more likely to be a victim in Port Moresby than in Sydney. I am unable to accept Mr Jennings opinion that the worker had no increased risk of being the victim of such a crime when living in Port Moresby. I conclude that whilst living in Port Moresby, the worker was subject to increased risk of being the victim of robbery or burglary and of suffering personal injury in the course of such a crime.
116. The office hours in Port Moresby were 8.00am to 5.00pm. Those were contained in the "second draft" but omitted from the final document when the clauses relating to "cycle of work" were omitted. However, they are reinstated in exhibit 66. Whether the office was open on Saturdays and or Sundays the evidence is silent. The worker worked not only in his office but also in his apartment. Paragraph 19 of the applicant's affidavit (exhibit O) is this:
Phillip would sometimes work in the apartment and not just the office. I saw him working on a lap-top computer in the apartment. So far as I am aware the lap-top was provided by the first or second respondent.
117. The following two paragraphs must also be considered:
20. I saw my husband answer telephone calls in the evening which were work-related telephone calls. I know they were work-related because Phillip would say to me after the telephone call words to the effect: "That was just work".
21. From my own observations, there were files and papers in the apartment that referred to the First and Second Respondents. I would observe Phillip in the evening working through these files and papers.
118. Mr Viant gave evidence of the worker's working much longer hours. He said on 24 September 2001 at 15:
In reality it would be a 16 or 20 hour day, depending on where they are at, if you are working in the Port Moresby office you are more likely to be constrained to the opening and closing of the offices, if you are in the field, well, you would work dawn until dusk, and even when you are in the Port Moresby offices, because you had duties outside or responsibilities outside our normal geology type work, well, then you could be on duty for that evening, entertainment, those sort of things, because that is what you are required to do.
119. He gave evidence that the worker was "virtually on-call 24 hours a day (ibid at 17):
Q. Were there things like emergencies that maybe he would have to make himself available, to get up in the middle of the night and do things in this work.
A. Yes, well, he had the overall responsibility of the crews in the various areas where we had tenements or exploration licences, so if an issue occurred out in the wilderness, they had means of contact with Phil, so Phil would then have to make arrangements to either get them out or get something in, or help them out in whatever they required. So, basically, yes, he had to know and have his finger on the pulse, no matter where they were.
Q. And at whatever time.
A. Yes.
Q. Were these mines 24-hour operating.
A. The mines are 24 hours, but because you are dealing in areas of Papua New Guinea where you are dealing with the locals and there is compensation matters and those sort of things you deal with, they don't necessarily have to be done during daylight hours, so if you want to sit down and talk to the nationals about paying compensation for a pig that you might have run over or whatever, you need to sit down at their leisure, so you are virtually on-call 24 hours a day.
120. In her oral evidence, the applicant told me (Transcript, 25 September 2001, p 29) of the worker's receiving telephone calls during the night "up to midnight" but not after that time in her experience.
121. Mr Viant's evidence referred to entertainment. The evidence establishes that when the applicant was not at the apartment, some other employees of Placer were accommodated by the worker in his apartment, from time to time. On the evening of his death, the worker and the applicant entertained Mr Melchiar Pesa Togolo and his partner. Mr Togolo was General Manager, Corporate Affairs, Placer Niugini Ltd and a director of PPNGX. Inter alia, work was discussed over dinner. That dinner commenced at 8.30pm on Friday 3 October 1997 and concluded at 12.30am on 4 October. One and a half hours later, the worker was murdered.
122. The intruder demanded money. He stabbed the applicant then fatally stabbed the worker. He did steal from the apartment. One of the items stolen was a camera, which the worker used for both "work and play". Cameras had been previously stolen from this apartment and they were the property of "the Company" - see exhibit N. The intruder's motive was, clearly, theft.
Did the worker's death occur in the course of his employment?
123. In my view, this issue must be determined in the applicant's favour, on both of two bases. The first basis arises from the decision of the High Court of Australia in Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473; 8 NSWLR 242. After reviewing the earlier authorities, the joint judgment of Mason CJ, Deane, Dawson and McHugh JJ continues at 483 (CLR):
The distinction between an injury sustained by a railway worker as in Danvers and a non-compensable injury sustained by an ordinary employee after the day's work has ceased lies not so much in the employer's attitude to the way the interval between the periods of actual work was spent but in the characterisation of the period or periods of work of those employees. For the purposes of workers' compensation law, an injury is more readily seen as occurring in the course of employment when it has been sustained in an interval or interlude occurring within an overall period or episode of work than when it has been sustained in the interval between two discrete periods of work. Where an employee performs his or her work at a permanent location or in a permanent locality, there is usually little difficulty in identifying the period between the daily starting and finishing points as a discrete working period. A tea break or lunch break within such a period occurs as an interlude or interval within an overall work period. Something done during such a break is more readily seen as done in the course of employment than something that is done after a daily period of work has been completed and the employee has returned to his or her home. On the other hand, there are cases where an employee is required to embark upon some undertaking for the purpose of his or her work in circumstances where, notwithstanding that it extends over a number of daily periods of actual work, the whole period of the undertaking constitutes an overall period or episode of work. Where, for example, as in Danvers, an employee is required to go to a remote place and live in accommodation provided by his or her employer for the limited time until a particular undertaking is completed, the correct conclusion is likely to be that the time spent in the new locality constitutes one overall period or episode of work rather than a series of discrete periods or episodes of work. An injury occurring during the interval between periods of actual work in such a case is more readily perceived as being within the current conception of the course of employment than an injury occurring after ordinary working hours to an employee who performs his or her work at a permanent location or in a permanent locality.
Moreover, Oliver and the cases which follow it show that an interval or interlude in an overall period or episode of work will ordinarily be seen as being part of the course of employment if the employer, expressly or impliedly, has induced or encouraged the employee to spend the interval or interlude at a particular place or in a particular way. Indeed, the modern cases show that, absent gross misconduct on the part of the employee, an injury occurring during such an interval or interlude will invariably result in a finding that the injury occurred in the course of employment. Accordingly, it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment. In determining whether the injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment "and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen".
124. More recent application of this authority are McCurry v Lamb (1992) 8 NSWCCR 556 (CA) and Inverell Shire Council v Lewis (1992) 8 NSWCLR 562 (CA). Lamb was a shearer who was shot and badly injured while asleep in the jackaroo's cottage on a sheep station on which he was working for a shearing contractor. The jackaroo's cottage housed two female rouseabouts and the shearing contractor, who worked as the wool presser. Other members of the shearing team were housed in the shearers' quarters 400 yards distant. That was where Lamb was supposed to sleep. He had formed a relationship with one of the female rouseabouts and was sleeping beside her when he was shot by another worker, a rejected former sexual acquaintance. Lamb was held not to have been "out of bounds". He was sleeping in accommodation provided to him by his employer at a place where he was required to work in a "camp" by his employer. The appeal in Lamb was dismissed, as was the appeal in Lewis. In Lewis the worker was temporarily residing in a caravan park whilst attending a practical training course arranged by his employer. During an evening social activity, when present at another caravan within the park, the worker was shot and injured by a stranger who appears to have been disenchanted by the worker's and others' being entertained in his sister's caravan.
125. The only real question about the applicability of these authorities is whether this matter is appropriate to be categorised in what was the traditional category of "camping cases". If, for example, an employer hired a worker in Sydney to work for him for a fixed term of years or for an indefinite period in the one locality overseas, it would be, in my view, quite improper to apply Hatzimanolis to an injury received in that locality outside normal working hours. The following considerations lead me to the view that Hatzimanolis ought be applied:
1. PPNGX hired in NSW a New South Welshman to work for it in both Port Moresby and other places in PNG on the basis that his "point of origin" was Sydney and that he was to work four weeks in PNG and then have two weeks off with PPNGX paying the cost of returning the worker to Sydney at the end of each four weeks and then the cost of his return to PNG at the end of the two weeks off. To use the jargon that appears to be used in PNG, this was a "fly in, fly out" arrangement, not a contract which required indefinite service in the one foreign place.
2. Whilst the worker was provided with accommodation in Port Moresby, it is clear that at times he would be in "the field", at exploration sites and mines in which circumstance the Hatzimanolis principle would be applicable, if his "base" were Port Moresby. The view can accordingly be taken that each place in PNG, including Port Moresby, is covered by the principle if one considers the worker's "base" ("point of origin") to be Sydney, which is the clear inference to be drawn from exhibit 66. I prefer this latter view.
3. In the quotation cited from Hatzimanolis supra their Honours endorse the view that regard must be had to the "general nature, terms and circumstances of the employment". In my view, it is necessary to consider in this regard the promise of PPNGX to provide the worker with accommodation in Port Moresby, which was at the Lodge The worker was not contractually bound to reside in it but clearly had the right to do so. It was "authorised". In my view the parties to the contract of service "expected" the worker to reside at the Lodge. That enabled the worker to maximise his income and was of assistance to PPNGX to have its District Geologist residing in the same building where his office was and where he would be easily contacted for work purposes. These considerations fortify me in the view that whilst residing in the Lodge, the worker was in the course of his employment.
126. The second basis in which the applicant is entitled to a finding that the worker was in the course of his employment is the view I have reached that the worker was in the course of his employment 24 hours per day. I cited at [121] above the evidence of Mr Viant in which he concluded that the worker was "virtually on call 24 hours a day". When one considers that evidence and the worker's duties in PNG, the fact that the mines operated 24 hours per day and the fact that emergencies could happen at any time, the worker was on call 24 hours per day. If a mine was hit by an earthquake or other natural disaster or a civil disturbance even in the small hours of the morning, the worker's duties required him to deal with it. A finding of 24 hour employment was one of the bases on which the worker in Favelle Mort Ltd v Murray (1976) 133 CLR 580; [1976] WCR 37 succeeded. The first instance judgment is at [1974] WCR 16, the relevant findings being at pp 21-2. Leave to appeal to Her Majesty-in-Council was refused by their Lordships on 16 February 1977. The worker's employment in the current matter is properly regarded as continuous when he was "in the field", that is, outside Australia, during each four week period referred to in clause 2 of exhibit 66.
Did the worker's death arise out of his employment?
127. An injury arises out of the employment if there is a causal relationship between the injury and the employment, that is, the work that a worker is required to do: on the meaning of "employment" see Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 at 632-3, 641; Stanton-Cook v TAFE Commission (1999) 17 NSWCCR 632 at [36] citing Stewart v NSW Police Service (1998) 17 NSWCCR 202 at 216; Mercer v ANZ Banking Group (2000) 48 NSWLR 740; 20 NSWCCR 70 at 76. Originally, the test for compensability was that the injury "arise out of AND in the course of the employment" (the "conjunctive test"). In 1942, the NSW test was changed to "Arising out of OR in the course of the employment" (the "disjunctive" test). In saying this, I leave aside the period between 1926 and 1929 when, in NSW, it was only necessary to prove that the injury arose in the course of the employment. Since 1942 the jurisprudence relating to "out of the employment" has withered as it was always easier to prove that the injury arose in the course of the employment.
128. The courts developed two principles or doctrines which appear to me to be the two sides of a coin. One doctrine was that of "added peril" which the late Prof Mills describes thus:
In very general terms the principle was that if the worker, by his own independent act, added a new risk to the employment, any injury resulting from that risk did not arise out of the employment". Workers Compensation (NSW) 2ed, Butterworths, 1979, at 79.
129. The converse doctrine was that of "special exposure" which the same learned author describes thus:
The need to demonstrate that the injury had arisen out of the employment gave rise to the principle that it was necessary to show that the injured worker had been especially exposed to the risk of injury which in fact had befallen him: either that this was a risk of a different kind from that encountered by mankind in general or that the employment exposed the worker to a community risk to a degree greater than that experiences by those of the community who were not engaged in that employment. (ibid at 87.)
130. It is the latter doctrine that ought be considered in the current matter. The development of the doctrine is adequately discussed by the same author at ibid 87 to 91.
131. In Stewart v Metropolitan Sewerage and Drainage Board (1932) 48 CLR 216, the deceased worker was employed by the Board as an overseer to ensure that a contractor to the Board carried out his work according to the specifications. The worker was required to be on the job whilst the contractor was carrying out work, but was free to have his lunch whenever he wished. Employees of the contactor were boiling a billy on a primus stove for lunch. The worker came to the place where the billy was being boiled and sat on his haunches near the man who was boiling the billy. That man tried to remedy a defect in the stove, but the stove exploded, and the worker sustained injuries which caused his death. Perdriau J found for the widow, but was reversed in the Supreme Court by Halse Rogers J, Harvey ACJ agreeing, Davidson J dissenting. The High Court restored the award of Perdriau J, Gavan Duffy CJ, Rich, Starke, Evatt and McTiernan JJ agreeing, Dixon J (as he then was) dissenting. The following appears in the joint judgment of Gavan Duffy CJ, Evatt and McTiernan JJ:
In Fisher or Simpson v London, Midland and Scottish Railway Co Viscount Dunedin said: "If the deceased was in the course of his employment, as that was explained in the case of McNeice v Singer Sewing Machine Co , which was approved by this house in Dennis v White and Thom or Simpson v Sinclair , if there are facts from which it may be deduced that his employment brought him within, or allowed him to be within, proximity of the peril to which his death could properly be ascribed, and the arbitrator comes to the conclusion that the accident which causes death arises out of, as well as in the course of, his employment, his judgment should not be disturbed." In the same case Lord Tomlin said that "at the time of the accident the deceased was travelling in the railway carriage in the course of his employment subject to the inherent risks, slight though they may ordinarily be, of falling from the carriage through insecurely fastened doors or open windows."
It seems to us that Simpson's Case is a strong authority in favour of the appellant. The accident was "unexplained," and yet, as Lord Tomlin pointed out, "where the evidence establishes that in the course of his employment the workman was properly in a place to which some risk particular thereto attaches and an accident occurs capable of explanation solely by reference to that risk, it is legitimate, notwithstanding the absence of evidence as to the immediate circumstances of the accident, to attribute the accident to that risk, and to hold that the accident arose out of the employment." This re-statement of the cases shows clearly that if Astill was "in the course of his employment" properly at a place near the stove, his accident also arose "out of" his employment if it arose because of a "risk particular thereto" attached to that place. What is really the same principle is stated by Russell LJ in Lawrence v George Matthews (1924) Ltd as follows: - "Sufficient causal relation or causal connection between the accident and the employment is established if the man's employment brought him to the particular spot where the accident occurred, and the spot in fact turns out to be a dangerous spot. If such a locality risk is established, then the accident 'arises out of' the employment, even though the risk which caused the accident was neither necessarily incident to the performance of the man's work, nor one to which he was abnormally subjected."
We think that some confusion has been caused by a misunderstanding of Lord Justice Russell's phrase "if the man's employment brought him to the particular spot." This cannot mean that there has to exist any special duty to be at the particular place of the accident. In Lawrence v George Matthews (1924) Ltd the commercial traveller was not bound to be at the spot where the tree fell, any more than the collector in McNeice's Case was bound to be at the spot where he was kicked on the knee by a passing horse. The condition is satisfied if the worker, whilst in the course of his employment, may properly come and does come to the point of danger. It is there that his "employment brought him." Lord Tomlin in Fisher or Simpson v London, Midland and Scottish Railway Co refers to "a place to which some risk particular thereto attaches," and proof of the character of the place is often afforded by the occurrence of the accident. The place "turns out to be" a place of special danger (per Lord Shaw in Thom or Simpson v Sinclair).
Does the present evidence support a conclusion that the place of the accident was a "zone of special danger"? In our opinion it does. There is a risk of explosion of a kerosene stove in use, and that risk was borne by those who were close to the stove. Lenham was injured by the explosion of it, as well as the deceased. The actual explosion is conclusive evidence that there was a distinct risk attached to that part of the job where the stove was being used. It "turned out to be" a place of special danger. On this question of whether the accident arose "out of" Astill's employment, the Supreme Court laid stress upon the absence of any duties on Astill's part "associated with" the stove. But this is as irrelevant as the absence of any duty of the commercial traveller in relation to the tree which was struck by lightning (Lawrence's Case), or of the salesman in relation to the horse which kicked him (McNeice's Case), or of the railway guard to the windows or doors of the carriage, out of which he fell whilst "in the course of" his employment, but not in the course of any particular work or duty to the employer (Simpson's Case).
132. Cadzow Coal Coy Ltd v Price [1944] 1 All ER 54 was a Scots case. The worker was injured in an explosion in a coal mine. The worker and his mate were preparing a coal cutting machine for its work. The mine was known to be one in which there was a likelihood of flammable gas. The explosion was cause by the ignition of firedamp, but the cause of the ignition was unexplained. The worker was not held to be guilty of serious or wilful misconduct. The Sheriff Substitute found for the employer, but the Second Division of the Court of Session reversed that decision. The employer's appeal to the House of Lords was unanimously dismissed (Viscount Simon LC, Lords Thankerton, Russell of Killowen, Macmillan and Wright). The Lord Chancellor said at 55:
It is, of course, quite correct to say that an injured workman claiming compensation under the Workmen's Compensation Acts must prove that the accident which injured him arose out of and in the course of his employment, but that is an entirely different thing from saying that the workman cannot recover unless he can show affirmatively exactly how the accident happened. The Lord Justice Clerk was, I think, thoroughly justified in observing that:
… it was a matter of judicial knowledge, in view of half a century of legislation and statutory rules and orders bearing upon safety in coal mines, that the risk of such an explosion is notoriously a risk inherent in the employment of coal getting underground …
at any rate in a mine where an accumulation of inflammable gas was to be expected and where the prohibition against the possession of matches, etc, was applied. In such a case (to use the language of Lord Finlay in Dennis v White ), the risk of injury by explosion is a risk "inherent in the employment," or, as Lord Atkin said in Dover Navigation Co v Craig at p 196:
This particular risk of injury by accident was inherent in the nature of the employment; it was a necessary incident to the performance of the … work.
There is a long line of cases beginning with Challis v London & South Western Ry Co (where an engine driver was injured by a stone dropped by a mischievous boy from a road bridge crossing the line when the engine was passing underneath), and including well-known decisions of this House, such as Trims School v Kelly (assault on schoolmaster of an industrial school), Dennis' case already quoted (risks of street traffic), and the Dover Navigation case (risk of a seaman in West African ports catching yellow fever), which show that a workman's accident should be regarded as arising "out of his employment" if the risk of such an accident is one to which his occupation is specially exposed. In that event, the workman discharges the onus which is on him to prove that the accident arises out of his employment by proving that it was the operation of this risk which injured him.
The fallacy involved in the other view is to suppose that the claimant does not prove that the accident arose out of his employment unless he proves affirmatively exactly how the said risk to which he was exposed came to operate. That is not so. The contrary is established by the decision of this House in Lochgelly Iron & Coal Co Ltd v Lindores. It is surely evident that a sailor, who is specially exposed by reason of the nature of his employment to infection from yellow fever, has not to prove how he caught it before he can say that his misfortune arose out of his employment, and that a servant whose duty is to cycle along crowded streets and is consequently exposed by reason of his employment to the risk of traffic accidents is not required to prove exactly how such an accident occurred before he can say that it arose out of his employment. Similarly, in the present case. Inasmuch as the risk of explosion in the mine is a risk inherent in the employment of the respondent, he satisfies the requirement that he must prove that the accident arose out of his employment by proving that the accident arose out of an explosion.
133. Lord Wright said at 58:
Thus not every injury by accident which befalls a workman during the period in which he is employed gives a claim under the Act; it must further be shown that it "arose out of" the employment. These simple words have often been discussed and have been paraphrased by such expressions as "connected with", or "incidental to" or "inherent in" the employment and the like. These expressions help to emphasise that it is necessary to show the nexus between the injury and the employment, but I prefer the simple and untechnical words of the Act, "arising out of the employment." The claimant need not go beyond the superficial nexus. He need not show that the nature of the work he was doing caused the accident. Thus in Thom's case the woman, engaged as a fish curer, was injured because the roof of the shed in which she was working fell upon her. The roof fell upon her because of something in itself extrinsic to her employment; the collapse of the roof was caused because on the adjoining premises the owner was building a new wall. In Brooker's case the workman was injured because his employment took him to a shop which collapsed upon him while he was there, because of the sudden shock of an earthquake. Theses two instances out of many reported cases show how remote may in one sense be the connection between the employment and the accident. It is enough that the exigencies of the employment brought the workman within the range of the particular danger and exposed him to its impact, whereas but for his employment he would not have been exposed. Thus the injury arose out of the employment. The danger affected him to a degree and in a manner beyond those who were exposed to such risks in the normal course of affairs. A striking application of the principle is to be found in the Dover case, where the injury by accident was due to the bites of malarious mosquitoes on the West Coast of Africa, which caused the death of the sailor. It was only his employment which took him to that dangerous region, of which he was not normally an inhabitant to whom such risks were endemic.
It would seem to follow from these instances that when the claimants here had sufficiently established that by an accidental explosion of firedamp in the mine in which they were working in the course of their employment they had suffered their injuries, they had proved their case. The explosion inured them because their employment brought them to the very place in or near which the explosion occurred. They were not required to show how or why the explosion took place. Their claim was not barred because the cause of the explosion was unexplained and unexplainable by them.
134. In O'Brien v Commonwealth of Australia (1967) 117 CLR 66, the worker was a linesman employed by the Postmaster General. He was a member of a gang which was laying cables. He was required to live in a camp provided by the employer. The worker returned to the camp at 6.00pm one evening, after finishing work. He had his evening meal and then prepared to take a bath. Whilst taking hot water from a copper to place in the bath, using a bucket, the bucket hit the copper, throwing boiling water on the worker. The High Court (McTiernan, Kitto and Taylor JJ) unanimously found for the worker. It was only necessary that the injury arise in the course of the employment, and it was so found. The circumstances of this case would today be governed by Hatzimanolis. However, when one considers what fell from McTiernan J at 74 and from Taylor J (with whom Kitto J agreed) at 76, it appears to me that their Honours might have found that the injury arose out of the employment were it necessary to do so.
135. The late Prof Mills also refers in his discussion of the doctrine of special exposure to Danvers v Commissioner of Railways (1970) 122 CLR 529. The facts of this case would now be governed by Hatzimanolis. The worker died whilst sleeping in a railway van which was on a siding near Coolac. For unexplained reasons, the van caught fire and in that fire the worker was killed. The van was used as a place of temporary lodging by the worker whose job required him to travel in the course of his employment with the Railways. Barwick CJ referred to the worker as a "peripatetic carpenter". Dignam J held that the worker's death arose out of and in the course of his employment. In the Court of Appeal, Wallace ACJ would have remitted the matter for the making of further findings but Hardie AJA (with whom McLelland JA concurred) allowed the appeal on the basis that neither limbs of the disjunctive test had been satisfied. The High Court restored the award on the basis that the worker's death arose in the course of his employment (Barwick CJ, McTiernan, Kitto and Windeyer JJ, Menzies J dissenting). Barwick CJ said at 536:
I am far from thinking that if it were not in the course of his employment to live in the van that even added risk in using it would justify a finding that his injury arose out of his employment.
136. Clearly, his Honour meant by "added risk" the special exposure principle. Strictly, this is obiter dictum. McTiernan J said that he "would vary the finding of [Dignan J] by excising the words "both" and "and out of" from finding 1(a) of the award" but gave no reason for doing so. Kitto J agreed with Barwick CJ and wished to add nothing. Windeyer J agreed with the Chief Justice and added some comments that did not touch on the issue of "out of" the employment. Menzies J held that neither test of compensibility was satisfied. On the issue of the causal relationship, he said this at 542:
I am satisfied that the finding that the worker suffered injury arising out of his employment cannot be supported. All that can be said is that the worker suffered an injury while he was in the van provided as living quarters by his employer. It is, of course, true that the deceased would not have been where he was but for his employment, but this circumstance is not enough to warrant the finding of a causal relationship between the work and the injury. If it were, then every accident that happened while a person was at work would arise out of his employment. This is not so. An injury may arise in the course of a worker's employment which does not arise out of it. The mere fact that an accident happens at work does not bring that accident within the category of an accident arising out of the employment. Kavanagh v The Commonwealth (1960) provides an instance of this. The accident there did arise in the course of the worker's employment because it happened at work; that accident did not, however, arise out of the worker's employment. See too Goward v The Commonwealth (1957). A finding that a worker's employment brings him within some special risk which eventuates and causes injury may warrant the conclusion that the accident arose out of the employment but there was no evidence in this case to show that the accident happened by reason of the deceased's employment. The accident arose from a fire of unknown origin and there was no evidence that the deceased died as he did because of special risk associated with his employment.
137. The next case which must be considered is Favelle Mort Ltd v Murray (1976) 133 CLR 580, to which I have earlier referred. Murray was a project engineer who was sent by his employer from Sydney to New York to work as a supervisor of the company's cranes that were being used in the construction of the ill-fated World Trade Centre. While in New York he was attacked by a virus and developed meningo-encephalitis as a result of which he suffered severe disabilities. The ultimate findings of Langsworth J are set out in the judgment of Barwick CJ. His Honour held that the worker was in the course of his employment when the virus entered his body, but this could not be held to be personal injury simpliciter. He found that there was no evidence that the employment especially exposed the worker to the risk of viral infection, which was a common risk both in Australia and the United States of America. Accordingly, it was not demonstrated that the employment was a contributing factor to the meningo-encephalitis and the award was made for the employer. A number of issues were canvassed on the High Court.
(a) whether the entry of the virus was personal injury simpliciter ;
(b) whether decided authority permitted such a finding (this question has been more recently addressed in Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310);
(c) whether the requirement of a "contributing factor" is the same as "arising out of employment", or less, (the latter);
(d) whether employment was a contributing factor.
I need only consider the latter aspect.
138. Barwick CJ said at 584:
If the only basis upon which an award of compensation could be made in favour of the respondent is the satisfaction of the extension by par (a) of the definition of "injury" in s 6(1) of the Act, the matter for decision is whether his employment contributed to the contraction by the respondent of meningo-encephalitis. Clearly, it cannot be said that the nature of anything the respondent was required to do by his employment contributed to cause his morbid physical condition. But it is also quite clear that it is not necessary that this should be so in order that it may be concluded that the employment contributed to the contraction of that condition. There was quite clearly a moment, though not discernible or capable of precise or even approximate identification, when the virus attacked the respondent and entered his body. That, rather than the first manifestation of the meningo-encephalitis, must be regarded as the relevant contraction of the disease, if the case is to be treated as within the extension of the definition of "injury". Not only was he at that time in the course of his employment, but he was at the place where he was endangered by the virus because his employment required him to be there. It is clearly quite immaterial that any member of the public, if at that same place at the same time or for that matter anywhere in the vicinity, might have been similarly attacked by the virus with comparable results. It is sufficient, in my opinion, that the virus attacked the respondent at that place and time. For him, it was for that reason a place of danger or, if you will, of special danger; a place at which he must be in fulfilment of his employment. It is to my mind only the correspondence of the place of his employment with the totality of the area in which he lived that appears to raise a problem in this case. Had he been required by his employment to be at some particular place in a confined area, such as a building, and he was there attacked by a virus with the consequences experienced by him in this case, there would not seem to me to have been the same difficulty in accepting that he received the virus at the place where his employment required him to be and that, in consequence, that obligation of his employment contributed to his injury in the extended meaning of that word. In my opinion, that being for him, as it would have proved to be, the place of danger, the formula contained in the extension of the definition would have been satisfied. I can see no reason why the same conclusion should not follow in the present case where the area in which his employment required the respondent to be was coincident with the entire area in which he lived or worked during his tour of duty abroad. Although some manifestations of the meningo-encephalitis were present during the aeroplane journey from America to Australia, it may be possible that the viral attack occurred during the journey. But, having regard to the findings of the Commission, the journey formed part of the employment and the aeroplane was a place where at the relevant time the employment required the respondent to be.
Although the former statutory requirement that an injury should arise out of the employment as well as in its course is, in my opinion, more stringent in relation to the causation of the injury than the requirement that in the case of disease the employment should contribute to its contraction, the several expressions of their Lordships in Thom v Sinclair are, in my opinion, quite apposite in resolving the present situation. I would respectfully agree with the views of Lord Haldane and Lord Shaw to which I now refer. Lord Haldane posed for himself the question "Has the accident arisen because the claimant was employed in the particular spot on which the roof fell? If so, the accident has arisen out of the employment ...". It is apparent from earlier passages in his Lordship's speech that it was the obligation of the employment to be at the particular place where the injury was received which brought the case within the scope of the formula "arising out of the employment". The mere chance that the employee was at that place in the course of his employment may be insufficient. Lord Shaw thought that if the nature, condition, obligations or incidents of the employment brought the workman within a zone of special danger, the words of the statute "arising out of the employment" would be satisfied.
Here, the area of special danger in the sense used by Lord Shaw was the place or area where the virus in fact entered the respondent's system. As I have said, it is nothing to the point that many others, members of the public, were there exposed to the risk of viral attack. Further, the idea that the employment must have been of a nature to carry a special risk of suffering injury of some particular kind has been exploded and is no longer valid.
If, therefore, the only basis upon which the respondent could succeed in an application for compensation is proof that his employment contributed to the contraction of meningo-encephalitis, I am prepared to dismiss this appeal upon the ground that, upon the findings of the learned Chairman, the respondent did receive an injury by contraction of a disease to which the employment was a contributing factor. Accordingly, the order made by the Supreme Court was, in my opinion, correct.
139. McTiernan J merely held that the worker had suffered personal injury and did not deal with other issues. Mason J (with whom Stephen J agreed) said this at 598:
The issue on the facts as found is: Did the employment contribute to the injury? In my opinion an affirmative answer must be returned to this question. In the circumstances of this case which present some distinctive features I am of the opinion that had it not been for the employment then on the probabilities the respondent would not have contracted the disease. The employment exposed him to the risk of contracting the disease, a disease so rare in its incidence that it is improbable that the respondent would have contracted it had he remained in Sydney. Furthermore, the respondent was employed on what was virtually a twenty-four-hour-day basis in the United States. The consequence was that he was able to prove that he contracted the disease in the course of his employment, a finding often beyond the reach of a worker who contracts a disease.
140. Jacobs J held that the worker had sustained personal injury and that reasoning flowing from Slazengers (Australia) Pty Ltd v Burnett [1951] AC 13 did not prevent such a finding. He continued at 601:
Alternatively, the respondent is entitled to an award upon the ground that he received an injury, namely, a disease contracted in the course of his employment and to which the employment was a contributing factor. The nature of the work done in the employment need not be a factor contributing to the onset of the disease. It need only be the employment which is the contributing factor. The employment, if the particular nature of the work done therein be irrelevant, is simply the carrying out by the worker of his duties as directed by the employer at a particular place and at a particular time. The respondent was required by the appellant to be at his work at the particular place and at the particular time. At the place and time he suffered the exposure and infection which led to the disease. It must follow that the exposure and infection which led to the disease were the result of him being engaged in his employment at that particular place and at that particular time. This is to say much more than that he contracted the disease in the course of his employment in a temporal sense. In addition to this temporal factor there was the factor of location, not a casual or chance location but a location imposed upon him by his employment which was the actual source of the disease. I find it irrelevant that he might just as well have contracted the disease at another time or place when he was not in the course of his employment, even if this be assumed to be so. Though it is not sufficient that the disease be contracted in the course of the employment, it is sufficient if the disease invades his body as a result of its presence in his place of employment during the time of his employment; then the employment is a contributing factor. The result is that any disease proved to have been contracted by a worker at the place and during the time of his employment, not being a disease of autogenous origin within his body but being a disease contracted as a result of the presence at the place of employment of the organism or other substance which invades or attacks his previously healthy body falls within the conditions prescribed in the definition in s 6(1). That being so, there is little, if any, difference in result between categorizing the invasion or attacking of the body by a foreign organism as an injury within the first part of the definition of injury in s 6(1) or as a disease within the second part of the definition. On either approach there is an injury within the definition of that word in s 6(1). On either approach, therefore, in the present case the respondent received an injury within the meaning of those words in s 7(1).
141. Applying that which fell from Barwick CJ and Jacobs J to the facts of the current matter, the worker's death arose in the course of his employment. The Lodge became a place of danger, or of special danger, to the worker. His employment put him in the particular place at the particular time when he met his death. However care should be taken in applying these dicta when one considers that the causal test accepted in Murray was less than arising out of the employment.
142. In my view, the worker's death did arise out of his employment because not only did it put the worker in the place and at the time when he was killed, but his employment also exposed him to the increased risk of personal injury, to the increased risk of being a victim of a burglary whilst residing in Port Moresby, findings I made at paras [114] and [115] above.
143. The facts of the current matter are very similar to those of Rolls v ATL Ltd [1980] WCR 45. The company had contracted to install totalizator equipment at the Shar Tin racecourse in the New Territories in Hong Kong. The worker was a senior employee of the company, a sales manager, and was sent by the company to Hong Kong to be in charge of the installation. Accommodation in Hong Kong was provided by the company. His usual place of work was an office in the Royal Hong Kong Jockey Club premises. The worker was on call 24 hours per day. The worker's wife and children came to visit him in Hong Kong, to stay with him in his apartment, provided by the employer. The workers' family arrived on a Thursday. On the following Saturday the worker was engaged in conferences for work between 10.00am and 5.30pm. The worker returned to his apartment where his wife had prepared dinner. In the course of dinner, thieves intruded into the flat and attacked the worker who died of his injuries. McGrath J (as he then was) found that the worker's death arose out of and in the course of his employment. His Honour said at 48:
In my view also, the injury arose out of the employment if only for the reason that the causative factor in this particular event was his very necessary presence in Hong Kong. Some appellate judges, I know, tend to take the view that this type of consideration is relevant to deciding whether the person is in the course of his employment, rather than it being a fact which really tends to support a causal nexus between the employment and the injury.
His very presence in the apartment on that particular day, at that particular hour, in my view, was still causally related to the events of the day which I have detailed. At the end of the long day instead of immediately saying, "Right, business is finished let's go out to a restaurant", the worker, at the end of a long day, rested for a while to recuperate and then refreshed himself with an evening meal, during which he was interrupted in the tragic way in which he was.
It is for all those reasons that I think that the injuries from which the deceased died arose out of, and also arose in the course of, his employment.
144. An appeal was dismissed: [1980] WCR 317. Moffitt P (with whom Hope and Samuels JJA agreed) held that the death arose in the course of employment and, therefore, it was not necessary to decide whether it also arose out of the employment. However, he said at 329:
In view of the foregoing conclusion, it is not necessary to consider whether there was evidence to support the alternative finding of McGrath J that the worker's injury arose out of his employment, except to say that support appears to be provided by the reasoning of this Court in the Favelle Mort case and in the High Court, but particularly from that of Barwick CJ in Favelle Mort Ltd v Murray (1975) 133 CLR 580 at 585-6: and the support which he found was provided by the speeches of Lord Haldane and Lord Shaw in Thom v Sinclair [1917] AC 127.
145. The observations of McGrath J (subsequently Chief Judge of this Court) and of Moffitt P fortify me in the finding that the worker's death arose out of his employment.
Substantial contributing factor
146. I have held that the worker's death arose both out of and in the course of his employment. Section 9A of the Act requires that the worker's employment be a substantial contributing factor to his death. If the decision of Mercer v ANZ Banking Group (2000) 48 NSWLR 740; 20 NSWCCR 70 be correct (and I am unable to say otherwise) then the requirements of s 9A have been fulfilled by my findings. Mason P held that the requirement of a substantial contributing factor was a lesser requirement than that the injury arise out of the employment. I have previously held that it is sufficient compliance with s 9A to find that the injury arise out of and in the course of the employment: Muscat v Woolworths Ltd (2000) 20 NSWCCR 283; Healy v Delta Electricity (2000) NSWCCR 491. Those two cases were recently mentioned in ICM Agriculture Pty Ltd v Perry [2002] NSWCA 257 by Mason P but no criticism was offered that those cases were incorrectly decided.
147. Many submissions have been made to me that Mercer is incorrect. One of those submissions is recorded in Muscat at [12] to [17].
148. It is also to be noted that the decision of Popovski v Ericsson Australia Pty Ltd [1988] VSC 61 relied upon by Mason P in Mercer has been subsequently overturned. There is some criticism of Mercer implicit in the judgments of Meagher and Giles JJA in Dayton v Coles Supermarkets Pty Ltd (2001) 22 NSWCCR 46.
149. I reiterate my view that "substantial" is used in a quantitative not a qualitative sense, that is, "large" or "weighty", not "real" or "actual". If the qualitative sense were applied there would be a double redundancy: that is, in the phrase "contributing factor", 'contributing' is redundant as a "factor" is by definition something that contributes; a 'real' or 'actual' contributing factor is merely saying a contributing factor, that is, a factor. As Meagher JA pointed out in Dayton at [15] this would give the adjective no meaning at all. Clearly his Honour takes the view that I have taken, after my lucubrations in Stewart v NSW Police Service (1998) 17 NSWCCR 202.
150. In the event that the court of Appeal reconsiders Mercer and holds that to be "a substantial contributing factor" something more is required than "arising out of the employment" what would my finding be in the current matter? In discussing the circumstances surrounding the worker's death I drew inferences that burglary was a foreseeable problem at the Lodge and that there were more robust measures available to secure the building from intruders (para [107]). Those findings, in my view, would be sufficient to establish a substantial contributing factor, if the higher test to which I have referred were applied rather than that laid down by Mercer.
Quantum
151. The worker was born on 19 April 1960. At the time of his death he was 37 years old. He could be expected to have worked for a further 27.5 years. The applicant was born on 11 July 1965. She was 32 years old at the time of her husband's death. She could be expected to have been dependent on her husband for 27.5 years from the time of his death, had he lived. The couple were married on 13 November 1996 in Nevada, where the worker was attending a Placer conference. However, they had lived together for many years prior to that time as husband and wife. In a "Nomination of Dependent Beneficiary" dated 8 April 1994 the worker described the applicant as his de facto wife (exhibit 97). In the applicant's affidavit (exhibit O) she attests that they had lived together in a de facto relationship for eight or nine years prior to their marriage, that is, since the late 1980s.
152. The applicant is a potter by occupation. Her 1996 income tax return shows a net loss from that business of $637. Her 1997 income tax return shows a loss of $364 from that business. In the financial year ending 30 June 1996 her sources of income were Commonwealth benefits of $3,350 and casual earnings of $7,570. Her taxable income in that year was $10,577. In the following financial year her casual earnings were $4,737 and her taxable income was $4,659. The amount of tax paid in the 1995/6 year is not disclosed, but would not have been great. Any tax paid in the following financial year is not disclosed, but her earnings appear, to me, to be below the taxation threshold. In her affidavit, the applicant stated that at the time of her husband's death, her annual income was $5,000. On that figure she was not challenged. I am prepared to accept that that roughly represents her after tax ordinary income. I accept that her net average weekly earnings were $100.
153. It is clear that the worker's salary was $90,000 per annum gross. That is a figure of $7,500 per month, from which tax of $2,389.65 was being deducted giving a net pay of $4,839.84 (see exhibit 76). That represents an annual net income of $58,078 or $1,116.89 per week.
154. According to Table 9.1 in Luntz, Assessment of Damages for Personal Injury and Death, 3ed, Butterworths, 1990 at p 396, in a household of two adults with no children, a wife is dependent on her husband's earnings to the extent of between 63% and 69%. Applying those proportions to the worker's net weekly income there is a range of $703.64 to $770.65. I accept a dependency of $750 per week, from which must be deducted the applicant's income of $100 per week, giving a net dependency of $650 per week.
155. $650 per week x 27.5 years at 3% amounts to $638,950. Applying the 5% rate, the sum is $513,500. If one applies the traditional 15% discount for the vicissitudes, then one comes to figures of $543,107.50 and $436,475. Even applying a higher discount of, say, 25% on account of the prospects of remarriage, one comes to figures of $479,212.50 and $385,125. Each of these latter sums far exceeds the statutory maximum of $235,350.
156. On the discounting of damages for wrongful death on account of the prospects of remarriage of a widow, the High Court is currently reserved. No submission was put to me that I ought discount statutory compensation for that factor. The applicant was not cross examined about it. There was no suggestion in the evidence that four years after her husband's death, when she was 36 years old, that she had formed any new relationship.
157. I am satisfied that her dependency far exceeded the statutory maximum. It was accepted by Mr Beauchamp that interest ought run on any award against the second and third respondents from 27 October 2000.
Award and Orders
158. 1. (a) I make an award for the applicant against the second respondent for $235,350 pursuant to s 26(c).
(b) I award interest on that sum at the rate of 6% per annum from 27 October 2000.
(c) I order the second respondent to pay the applicant's costs. I certify for two counsel. I certify for senior counsel. Liberty to apply for any other special costs orders.